Apple (AAPL) is facing a class-action lawsuit in the U.K. worth nearly $1 billion (£785 million), filed by app developers who accuse the tech giant of anti-competitive practices related to its App Store commission fees. This lawsuit seeks compensation for about 13,000 app developers, who have been charged excessive fees for selling apps or in-app subscriptions to Apple users since July 2017.
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The lawsuit was initially filed in 2023 by 1,566 app developers. The class action primarily centers on Apple’s 15-30% commission fees that it charges developers on App Store sales. The developers argue that these high fees stifle competition, ultimately harming both developers and consumers.
Investors should note that in April 2024, the U.K. Competition Appeal Tribunal rejected Apple’s request to dismiss the case, allowing the lawsuit to move forward. The court found that the developers had a chance of proving that AAPL was engaged in anti-competitive practices.
Apple’s App Store Practices Under Increasing Scrutiny
This legal action comes as Apple faces growing global regulatory scrutiny over its App Store practices. Amid increasing pressure from the European Union, Apple made some changes to its policies earlier this year. However, these adjustments have been criticized by developers and regulators for not sufficiently addressing the core issues.
Apple defends its App Store practices, arguing that it provides a secure and reliable platform for developers. The company also emphasizes that developers can reach users through web browsers, which are not subject to App Store regulations.
What Is the Price Target for AAPL?
Turning to Wall Street, AAPL has a Moderate Buy consensus rating based on 23 Buys, eight Holds, and two Sells assigned in the last three months. At $243.80, the average Apple price target implies a 0.47% upside potential. Shares of the company have gained about 27% year-to-date.
