By Edith Hancock
Apple is defending itself in the first hearing of a $1.8 billion U.K. class action lawsuit accusing the iPhone maker of abusing its dominance in the digital economy and overcharging customers on its App Store.
Lawyers representing the class action said on Monday that Apple excluded potential rivals from competing for customers on devices running its iOS operating system by forcing developers to sell their apps exclusively through its own App Store and charging commissions of 30% for purchases.
"Neither developers nor users have been able to exert power" over the tech giant to change its practices, the lawyers said, adding that Apple's dominance in app distribution and purchases is clear cut. The claim is led by Rachael Kent, a professor at Kings College London.
Apple said it faces competitive pressure from rival device manufacturers and alternative transaction channels, and that other companies such as Alphabet's Google charge a similar commission rate for app developers in its Play Store.
The tech giant added that the case is meritless and overlooks the benefits to consumers of its walled-garden operating system, which it claims is designed to protect users' privacy and security.
The collective action--one of the first major disputes against a Big Tech company to reach trial in the U.K.'s Competition Appeals Tribunal--comes as legal pressure is mounting on tech giants to make it easier for developers and smaller players that rely on their operating systems and app stores to make money.
The European Commission, the EU's executive arm, fined Apple 1.8 billion euros ($1.85 billion) in March last year following a complaint from Swedish music platform Spotify Technology that Apple's terms and conditions for developers were unfair.
Apple was also forced to allow rival app stores to set up shop on iPhones in the European Union last year after the Digital Markets Act, the bloc's new rulebook designed to curb big tech market power, came into force.
Write to Edith Hancock at edith.hancock@wsj.com
(END) Dow Jones Newswires
01-13-25 1054ET