Apple hit with a landmark UK ruling that could cost billions

23 October 2025

In a significant and possibly industry-defining decision, the Competition Appeal Tribunal (CAT) in London ruled on October 23, 2025 that Apple Inc. abused its dominant market position by charging developers excessive commissions on its App Store platform, setting the stage for what could become one of the largest payouts in UK class-action history.

The case stemmed from a lawsuit brought by British academic Rachael Kent on behalf of millions of iPhone and iPad users. The plaintiffs argued that Apple imposed an unfair terms of trade between October 2015 and end of 2020, requiring app developers to pay around 30 per cent commission on in-app purchases and downloads considerably higher than what the tribunal deemed reasonable.

According to the tribunal’s findings, Apple’s conduct shut out competing app-distribution channels and effectively locked developers into its ecosystem, giving the company “a 100 per cent monopoly position” in effect, the lawyers argued. The CAT held that Apple’s commissions were “excessive and unfair” for the period in question.

While Apple has long defended the commission structure by pointing to security, integration, and support features of its App Store ecosystem, the tribunal said those benefits did not justify the level of charge applied or the restrictive practices used to maintain control. For instance, the CAT indicated that the appropriate commission might have been closer to 17.5 per cent meaning developers were overcharged by the difference. In many cases these extra costs, the CAT found, were passed onto consumers, with about half of the excess burden estimated to land on end users.

From a financial standpoint the case is enormous. The class action is valued at approximately £1.5 billion (around $2 billion) in potential damages, depending on how compensation is calculated. A hearing next month will determine the exact amount and consider Apple’s application to appeal the decision.

Beyond the financial implications, the ruling carries broader industry significance. It is the first mass-consumer legal action against a major technology firm to reach trial under the UK’s relatively new collective action framework. The decision therefore has potential ripple effects for other big tech companies and their platform-business models.

Apple immediately indicated that it plans to appeal the decision, arguing that the ruling takes “a flawed view of the thriving and competitive app economy”. The company maintains that its App Store provides developers with a safe, trusted environment to distribute apps and manage payments and that restricting or reducing their commission structure would undermine that ecosystem.

For developers and users, the ruling opens a door to clearer accountability. The tribunal’s view that Apple’s practices passed on costs to consumers suggests that platform-owners might now face greater scrutiny on how commissions and platform fees translate into end-user pricing. The case may also encourage other lawsuits against other gatekeepers in the digital economy, including rivals such as Google LLC, where similar allegations over app-store commissions are already under investigation.

From a regulatory perspective the decision reflects growing concerns about the power of digital platforms and the barriers they impose on competition. The UK’s legal framework for collective action may now become a more potent tool for consumers and smaller businesses to challenge entrenched market structures. The CAT ruling signals that even the largest and most influential corporate players are not beyond the reach of the law when it comes to platform economics and market fairness.

For Apple the outcome marks a turning point. The company has operated for years under a business model that monetised app distribution and in-app payments through tightly controlled terms, and this ruling calls into question the sustainability of that model not only in the UK but potentially globally as regulatory and legal pressures mount. The consequences may force the company to rethink its commission structure, open up alternative payment methods, or relax its restrictions on distribution.

The decision also comes at a moment when tech regulation is accelerating worldwide, and the message is clear: platform dominance tied to restrictive business practices will face closer examination and possible challenge. As the hearing looms and Apple prepares its appeal, the broader tech ecosystem watches closely. The outcome may shape not only Apple’s future but how all major digital platforms govern developer-relations, pricing and competition in an increasingly global digital marketplace.