A green light for the Kent collective claim against Apple
In what is great news for millions who use Apple’s UK App Store, the Competition Appeal Tribunal has refused Apple’s attempt to limit Dr. Rachael Kent’s claim. The claim will now proceed in full to trial.
Dr Kent alleges that Apple has abused its dominant position, in breach of the Chapter II prohibition in section 18 of the UK Competition Act 1998 and Article 102 TFEU, by engaging in exclusionary and exploitative abuses in relation to purchases of apps and so-called ‘in-app purchases’ on Apple iPhones and iPads and the associated payment processing market. In particular, Apple has foreclosed all competition from actual or potential rivals in the distribution of apps and in-app purchases, and in the provision of the payment processing services used to make such purchases on iPhones and iPads. Apple exploits its monopoly by demanding a commission of, typically, 30% on all such purchases. Dr Kent alleges that the commission is an excessive and/or unfair price and, by charging it, Apple is acting in breach of EU and UK competition laws.
As a result, c. 19.6 million consumers and businesses may have been overcharged. Dr Kent’s claim seeks compensation on a collective basis on their behalf.
At a court hearing which took place on 4 and 5 May 2022, Apple attempted to argue that Dr Kent’s claim should exclude her allegation that the level of Apple’s commission in the UK App Store is unfair and excessive, on the basis that Dr Kent had applied the wrong legal test.
At the end of that hearing, the Competition Appeal Tribunal certified Dr Kent’s claim on the spot – a first for the UK collective proceedings regime.
On 29th June 2022, the Competition Appeal Tribunal handed down its judgment on Apple’s arguments that the wrong legal test had been applied, and dismissed all of Apple’s arguments and its attempt to limit Dr Kent’s claim.
The Tribunal held that Dr Kent had applied the correct legal test and therefore her unfair and excessive pricing claim against Apple could proceed to a full trial:
“[w]e do not accept Apple’s argument that the pleadings disclose a legal error or defective approach, either in relation to the correct legal test for the abuse or for the consideration of economic value in that exercise. Both elements are clearly recorded and accepted by [Dr Kent]”.
The Tribunal also made the collective proceedings order in light of its earlier decision to certify Dr Kent’s claim, which sets out the full scope of the class represented by Dr Kent.
Dr Kent isn’t alone in seeking to hold Apple to account for its alleged breaches of competition law. The UK Competition and Markets Authority and the European Commission are also investigating Apple’s conduct in the App Store. Apple is also facing regulatory action in the Netherlands, Australia, South Korea, India and elsewhere, and numerous private compensation claims around the world.
For more details about the claim, and to check if you are potentially included in the class, visit the dedicated App Store claims website.
The CAT judgment in full
The CAT collective proceeding order
Notes to editors
Dr Kent is represented by Lesley Hannah, Luke Streatfeild, Sofie Edwards, Kio Gwilliam, Anna Stellardi and Antonio Delussu at Hausfeld, with barristers Ronit Kreisberger QC and Michael Armitage from Monckton Chambers, Mark Hoskins QC, Jennifer MacLeod and Matthew Kennedy from Brick Court, and George McDonald from 4 New Square. Vannin Capital is funding Dr Kent’s claim, and Dr Kent has instructed expert economist Derek Holt from AlixPartners UK LLP.
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Conal Wash at Palatine Media