The UK Competition Appeal Tribunal has ruled that Apple breached UK and EU competition law by abusing its dominant position in the markets for iOS app distribution and in-app payment services. The judgment, handed down after a 28-day trial earlier this year, follows a collective action brought by Dr Kent on behalf of some 36 million consumers. The claim accused Apple of imposing exclusionary practices on app developers and charging excessive and unfair commissions of 30 percent for access to its App Store and payment systems.
In a detailed decision, the Tribunal found that Apple operates in two distinct markets — one for iOS app distribution and another for iOS in-app payment services — rejecting Apple’s argument that both form part of a broader “system” market linked to its devices. The judges accepted the claimant’s view that developers have no viable alternative to Apple’s App Store, and that the current level of commission is significantly above what would prevail in a competitive market.
Apple was found to hold a position of near-absolute dominance in both markets. The Tribunal dismissed Apple’s contention that competition in the wider smartphone market or the bargaining power of major app developers constrained its behaviour. Instead, it concluded that Apple’s contractual restrictions and control over distribution created exceptionally high barriers to entry and left developers with no meaningful choice but to accept its terms.
The Tribunal also determined that Apple had foreclosed competition through exclusionary conduct, notably by requiring that all iOS apps be distributed via the App Store and that all in-app purchases use Apple’s proprietary payment system. These practices, the judgment said, could not be described as competition on the merits because “Apple is not competing at all.” The tying of payment services to the App Store was found to meet all four legal conditions for an unlawful tie.
Apple sought to defend its conduct by invoking its intellectual property rights, citing the Magill precedent to argue that competition law cannot compel it to license its technology. The Tribunal rejected this defence, noting that Magill concerned a fundamentally different situation and that Apple’s IP was not the object of the exclusive reservation.
The judgment goes further, finding that Apple charged excessive and unfair prices in violation of both Chapter II of the Competition Act 1998 and Article 102 TFEU. Applying the test from United Brands v Commission, the Tribunal held that Apple’s commission was substantially above the cost of providing its services and that the price was unfair both in absolute terms and compared with benchmarks such as Steam, the Microsoft Store, and the Epic Games Store.
Apple’s arguments that its practices were objectively necessary for user safety, privacy, and performance, or that they generated efficiencies benefiting consumers, were also rejected. The Tribunal ruled that the restrictions were neither necessary nor proportionate to achieve those objectives and that any potential efficiencies were outweighed by the complete absence of effective competition.
In assessing the financial harm, the Tribunal concluded that developers were overcharged by the difference between Apple’s 30 percent commission and competitive rates of 17.5 percent for app distribution and 10 percent for payment services. It also found that half of this overcharge had been passed on to consumers. As a result, the class representative is entitled to damages reflecting the passed-on overcharge, plus simple interest at eight percent.
The decision represents one of the most significant findings against a major technology company under UK competition law and could have wide-ranging implications for the regulation of digital platforms. Coming as regulators and courts around the world intensify scrutiny of app store practices, the Tribunal’s reasoning — particularly its treatment of market definition, dominance, and excessive pricing — is likely to resonate well beyond the UK.
