On 23 October 2025, the UK Competition Appeal Tribunal (CAT) delivered a landmark judgment in Dr Rachel Kent v Apple Inc. [2025] CAT 67, finding Apple liable for multiple abuses of dominance in relation to its App Store operations. The unanimous decision, spanning 396 pages, is a major development in cases concerning digital markets in the UK. With damages ranging from £1.184 billion to £2.237 billion, the case has profound implications not only for Apple but for the broader digital economy and the future enforcement of competition law in platform markets.
by Anush Ganesh
Key Takeaways from the case
Narrow reading of Magill/Bronner: The CAT limited when IP rights can justify exclusionary conduct. Once a dominant firm licenses its IP widely, restrictions on downstream activities face intense scrutiny. The purpose and effect matter: restrictions must genuinely protect IP use, not merely prevent competition. This has implications for platform operators who license development tools broadly but impose restrictive terms.
Comparator assessment in excessive pricing: The CAT’s use of adjacent markets experiencing actual competition provides a template for overcoming the difficulty of finding direct comparators in monopolized markets. The ‘natural experiment’ of market entry effects (Steam’s response to Epic) offers powerful evidence of competitive pricing levels.
Quality justifications require quantification: Dominant firms that try to justify quality differences justify price premiums must quantify those differences, demonstrate their relevance to the services priced, and show proportionality to the price gap. Vague assertions about brand value or ecosystem benefits are insufficient.
Bundling and transparency: Firms cannot bundle multiple services, refuse to allocate costs transparently, then claim high aggregate prices are justified by unquantified component values. The lack of transparency undermines value-based justifications.
Willingness-to-pay fallacy: In assessing excessive pricing, courts must distinguish between prices reflecting genuine competitive value and prices reflecting exploitation of lock-in. The fact that customers pay does not prove fairness when they lack alternatives.
Case Facts: A Collective Action Against App Store Restrictions
Dr Rachael Kent brought collective proceedings on behalf of approximately 36 million UK iPhone users, alleging that Apple had abused its dominant position between 1 October 2015 and 15 November 2024. The central claim was that Apple imposed exclusionary practices on app developers and charged excessive prices with a headline commission rate of 30% for two distinct services: iOS app distribution and iOS in-app payment processing. (See para 1)
The case challenged three core aspects of Apple’s App Store model. First, Apple’s Developer Program License Agreement (DPLA) requires developers to distribute iOS apps exclusively through the App Store, prohibiting alternative distribution channels or rival app marketplaces. Second, for digital content and services, developers must use Apple’s In-App Purchase system and cannot offer alternative payment methods. Third, Apple’s Guidelines contain anti-steering provisions preventing developers from informing users about cheaper purchasing options outside the app.
While individual user losses were relatively modest (£27-£75 on average), the aggregate harm was substantial, reflecting the underlying philosophy of collective proceedings: enabling consumers to pursue claims that would not otherwise be economically viable while deterring anti-competitive behavior. (See para 2)
Market Definition: Two Narrow Markets
The CAT defined two separate relevant markets: one for iOS app distribution services and one for iOS in-app payment services. (para 308) This finding was critical to establishing Apple’s dominance. Apple had argued for broader market definitions including device sales, alternative app distribution channels, and alternative monetization models which were rejected.
While applying the Hypothetical Monopolist Test (HMT), the CAT recognized the ‘Cellophane Fallacy’ risk theory posited by the Class Representative’s expert witness, Dr. Singer, that Apple’s current prices might already reflect monopoly power, making them unsuitable as a competitive baseline. (See para 221) To overcome this, the CAT examined pricing in adjacent markets experiencing actual competition. The PC games distribution market proved particularly instructive. As the CAT noted in paragraph 230:
“We find the comparison with the PC games market to be a useful one. The distribution service being provided is similar to that provided by the App Store, albeit in relation to non-iOS apps. At one stage, Steam was the only significant distributor in the market. Epic then entered the market with an aggressive pricing position. Steam altered its pricing, as did a smaller competitor, the Microsoft Store. This seems to us to be a useful indicator of what the introduction of rivalry into a largely uncontested market might achieve.”
This experiment showed that Steam, which had charged 30% commission when it dominated the market, reduced its rate to 20% for the largest developers following Epic’s entry at 12% and Microsoft’s reduction to 12%. The CAT found that the 18-percentage point gap between Apple’s 30% and the Epic/Microsoft 12% rate far exceeded what could be explained by quality differences or product differentiation. (See paras 235-237)
Dominance: Structural Barriers and Lock-In
Having defined narrow markets, the CAT found Apple dominant in both throughout the claim period. Apple held 100% market share in iOS app distribution by definition as it is the sole channel through which developers can reach iOS users. (See para 321) The CAT emphasized multiple structural barriers to competition.
On the user side, high-value iOS users face significant switching costs. (See paras 329-337) The CAT found that iOS users value the broader ecosystem seamless integration across devices, services, and apps creating powerful lock-in effects. On the developer side, high-value developers cannot afford to forego access to the iOS user base. This creates insurmountable barriers: developers need to reach iOS users to monetize their apps, but the only way to reach those users is through Apple’s App Store under Apple’s terms. (See paras 338-349)
Analysis of Theories of Harm
Refusal to Supply its IP: The Magill Discussion
The most legally significant aspect of the judgment concerns the CAT’s analysis of the Magill/Bronner doctrine on refusal to deal with intellectual property. (See para 370)
(Sidenote: For readers wondering why EU Law and cases are relevant here post-Brexit, the infringement period spanned 2015-2024, and the UK was part of the EU between the 2015-2020 period. EU cases still hold persuasive value with the CAT as CA98 is based on Article 102 TFEU.)
Apple argued that its restrictions were justified as legitimate exercises of its intellectual property rights in its development tools. Apple contended that just as the television broadcasters in Magill and the pharmaceutical data company in IMS Health could reserve certain uses of their copyrighted materials, Apple could limit how developers use its proprietary tools specifically, by restricting distribution to the App Store and payments to Apple’s systems. (See paras 372-376)
The CAT systematically rejected this argument through its analysis spanning paragraphs 402 to 444. It distinguished between two elements: (1) Apple’s development tools and technology (SDKs, APIs); and (2) the App Store infrastructure itself. In relation to tools and technology, the CAT found that Apple licenses these broadly any developer who signs the DPLA and pays the $99 annual Program Fee can access them. (See para 63) 500,000 + developers do so, and the vast majority pay nothing beyond the Program Fee. As paragraph 431 observed:
“It is not immediately easy to see how there can sensibly be said to be any exclusive reservation of the tools and technology in those circumstances.”
The critical distinction, articulated in paragraph 432, is between “the reservation of property (the IP rights in the tools and technology) and the reservation of an ancillary activity (distribution services).” The restrictions don’t protect Apple’s IP from exploitation by others; they prevent competition in downstream distribution and payment services. As the CAT concluded: “Preventing the emergence of a competing sales channel is not necessarily the same thing as reserving property for exclusive use.”
The payment restrictions analysis proved even more damning. The CAT found that third-party payment service providers would use their own infrastructure and APIs, not Apple’s. Therefore, as paragraph 424 states:
“There is in our judgement no iOS in-app payment infrastructure which Apple could seek to reserve to itself by prohibiting the use of third-party payment services providers.”
The CAT quoted extensively from Apple’s own witness statements (See para 421 that quotes Mr. Schiller) showing that the payment restrictions exist to ensure Apple realizes a return on its significant investments and to prevent developers from circumventing In-App Purchases by offering an external payment mechanism so Apple can collect the commissions contractually payable. This led to the finding (para 422):
“The iOS in-app payment restrictions have nothing to do with reserving Apple’s property rights to itself. They instead prevent any effective competition in relation to iOS in-app payment services.”
The CAT carefully distinguished the classic refusal-to-deal cases. In Magill and IMS Health, the copyrighted information itself was reserved for specific uses the TV listings were reserved for the weekly format; the brick structure was reserved for sale into healthcare markets. The property owners used the copyrighted material exclusively in those reserved channels.
By contrast, as paragraph 434 explains, Apple’s restrictions apply to iOS apps that incorporate both the developer’s IP and Apple’s IP. Apple wants developers to create iOS apps and wants those apps distributed to as many iOS users as possible. Any iOS app can be distributed through the App Store to any iOS device user without restriction. Apple doesn’t publish the apps itself; it merely controls the commercial terms and distribution mechanism.
Paragraph 436 addresses Apple’s argument that achieving exclusivity in economic returns is conceptually similar to the Magill cases: “It may be that there is a similarity of outcome… in securing the exclusivity of an aspect of economic return by way of imposing a limitation of use. That however is not sufficient. There must be a proper reservation of an exclusive use of property.” The CAT found no such reservation where developers can distribute apps to any iOS user.
The overall conclusion appears in paragraph 437:
“Apple has not in reality reserved the tools and technology to itself in a way that would justify the protection from Chapter II/Article 102 that the Magill line of cases permits… What Apple has actually done is to impose conditions on developers which allow Apple to avoid rivalry and to ensure Apple’s strict control over the collection of the Commission.”
The CAT also addressed policy concerns about discouraging innovation as applying competition law will not create disincentives for Apple to innovate. According to the CAT in paragraph 438, this is because “Apple is incentivised to innovate by its desire to create user demand through the quality and extent of iOS apps offered in the App Store.” Apple benefits from making tools widely available to encourage developers to create attractive apps. It has been established in Google Shopping paragraph 112 that once a dominant firm grants access to its infrastructure, the impact on property rights from imposing competitive conditions is fundamentally different from forcing access in the first place. (See para 439) Having chosen to license widely, Apple faces correspondingly reduced IP protection for downstream restrictions.
- Tying Abuse: Leveraging Distribution Dominance into Payment Services
Beyond the refusal to supply analysis embedded in the Magill discussion, the CAT found Apple committed a distinct tying abuse, leveraging its distribution dominance to foreclose competition in payment services. The CAT applied the established four element test: (1) two distinct products, already established through separate market definitions; (2) dominance in the tying market, Apple’s 100% share in iOS app distribution; (3) no customer choice, developers cannot access the App Store without accepting IAP for digital content; and (4) foreclosure. (See para 502)
It found Apple committed a separate tying abuse by conditioning access to iOS app distribution on mandatory use of Apple’s payment system. Paragraph 523 states: “Apple has infringed Chapter II/Article 102 by tying its payment services (in the context of the iOS in-app payment services market), to the App Store, in circumstances where: there is separate demand for those products; Apple is dominant in the iOS app distribution services market; developers are required to purchase the tied product (in-app payment services) with the tying product (the App Store); and there is substantial market foreclosure as a consequence..”
- Excessive Pricing: Comparators and Overcharge
The CAT applied the two-limb test from United Brands: Limb 1 examines whether the price is excessive in relation to economic value; Limb 2 examines whether the price is unfair, either in itself or by comparison with other prices. The CAT’s analysis, particularly on comparators, provides important guidance for future excessive pricing cases.
Limb 1: Cost-Plus Analysis
For Limb 1, the CAT examined Apple’s profitability using return on capital employed (ROCE) and related metrics. Despite Apple’s arguments about the difficulty of allocating operating expenses to the App Store, the CAT found that a reasonable allocation methodology established “very significant level[s] of profitability on all measures” indicating a “significant and persistent difference between the Commission and the costs of operation of the App Store” (See para 667). The CAT emphasized that while Apple provides value to developers, “we are not however satisfied that the level of those benefits can in itself reasonably be taken to explain the very high profitability of the App Store” (See para 673).
Limb 2: The Comparator Analysis
The CAT’s comparator analysis for Limb 2 is particularly instructive. The Class Representative relied on PC games distribution platforms: Epic Games Store (12% commission), Microsoft Store (12%), and Steam (20-30%, reduced from 30% across the board to 20% for the largest developers post-competition). Apple challenged these comparators as ‘cherry-picked’ (See para 199) and argued the CAT should consider Google Play (30%), other Android stores (30%), and Apple’s own 2008 rate (30%) as evidence that 30% represents the competitive rate. (See para 200)
The CAT systematically rejected Apple’s proposed comparators. Google Play was inappropriate because the CMA’s Mobile Ecosystems Market Study found it also operates without effective competitive constraints. Apple’s 2008 rate was irrelevant because, as paragraph 673(10) explains, “by the beginning of the Claim Period in 2015, the competitive position had changed very materially so that Apple had not only captured a substantial market share, but had also created an access market for iOS device users which it could control through the restrictions.”
The CAT accepted the PC games comparators despite their imperfections. Paragraph 677(1) emphasizes that the critical insight from Steam is that “in the face of competition, Steam reduced its commission from 30% to 20% for those developers who are likely to be the most valuable to it.” This demonstrates what an incumbent distributor does when facing a credible competitive threat.
For Epic and Microsoft, the CAT acknowledged potential quality differences but found these could not explain the magnitude of the price gap. Epic’s maintained 12% rate, even as the platform grew, shows this is “a commission level which has allowed Epic to attract developers and users” (See para 677(2)(ii)). Microsoft’s reduction from 30% to 12% in August 2021 provides “important evidence of the price which developers are willing to pay in conditions of workable competition.” (See para 677(2)(iii)).
The CAT concluded in paragraph 679 by stating “the commission rates charged by the PC app distribution platforms of Steam, the Microsoft Store and the Epic Games Store are valuable comparators……a commission for app distribution in conditions of workable competition might be in the region of 12% to 20%, with some possible adjustment to the 12% rate to reflect differences in quality, scale and reputation.”
Apple argued that its 30% Commission is justified by the value it provides through its tools, technology, brand, and ecosystem. The CAT comprehensively rejected this argument for multiple reasons detailed in paragraph 673. Critically, Apple never quantified this value despite expert evidence that such quantification was possible. The CAT also identified a transparency problem: “Despite the Program Fee being identified as payable in return for access to Apple’s tools and technology, Apple takes the approach of seeking to recover the value of those tools and technology through the Commission, which is inconsistent with the description in the DPLA of the purpose of the Commission.” (See para 673(7)).
Perhaps most importantly, the CAT identified the ‘willingness-to-pay fallacy’ in paragraph 673(3) which is that developers may pay Apple’s price not because it fairly reflects value but “because of their wish to access the iOS user base to which Apple controls access.” (See para 673(3)) This links Apple’s restrictions that create the lock-in effect which in turn enable excessive pricing.
The CAT’s final conclusion on excessive pricing appears in paragraph 681: “We have found that the Commission is excessive (under the Limb 1 analysis) and unfair (under the Limb 2 analysis by reference to it being unfair in itself and by reference to comparators). We therefore conclude that Apple is abusing its dominant position by charging excessive and unfair prices.”
For calculating damages, the CAT needed to determine competitive pricing levels. Using the comparator evidence, it established that the competitive rate for iOS app distribution services would be 17.5% (based on the 12-20% range, with adjustments). For iOS in-app payment services, the competitive rate would be 10%. The CAT found that developers passed on 50% of the overcharge to consumers, resulting in aggregate damages of £1.184 billion to £2.237 billion including interest at 8%.
What the Future Holds
This judgment has immediate implications for parallel proceedings and broader regulatory developments. The CAT rejected Apple’s security and efficiency justifications for its restrictions, finding that alternative app stores and payment systems can operate securely as demonstrated by macOS, Google Android, and other platforms. This reasoning strongly supports ex ante regulatory interventions under the EU’s Digital Markets Act and the UK’s Digital Markets, Competition and Consumers Act 2024, both of which require gatekeepers to permit alternative app distribution and payment systems.
The judgment also provides strong judicial validation for the CMA’s findings in its Mobile Ecosystems Market Study and supports the designation of Apple’s mobile ecosystem as having Strategic Market Status under the DMCCA (which came out a day prior to the CAT’s current ruling. See here for more details on the Mobile SMS Designations). The competitive pricing benchmarks established (17.5% for distribution, 10% for payments) give regulators concrete reference points for assessing whether terms imposed by SMS firms are “fair and reasonable.”
For pending litigation, the implications are significant. As Matthew Kennedy, Barrister for Dr Kent, noted at a UCL Faculty of Laws event discussing future cases such as Sean Ennis v Apple (which involves similar facts regarding the 30% overcharge to developers): the developers “will get to claim the other half of the damages.” This reflects the CAT’s finding that developers absorbed 50% of the overcharge while passing 50% to consumers.
The Kent v Apple judgment establishes the legal framework and factual findings that developer claimants can build upon, potentially avoiding the need to relitigate many core issues. The judgment may also influence ongoing regulatory investigations and enforcement actions worldwide. Authorities in the EU, US, Australia, Japan, South Korea, and elsewhere are examining app store practices. The CAT’s comprehensive analysis provides a model for competition authorities and courts grappling with similar issues in digital platform markets.
Perhaps most significantly, Kent v Apple demonstrates that collective proceedings can work effectively to address consumer harm in digital markets. The case progressed from filing to trial in under four years, resulted in a comprehensive judgment addressing complex economic and legal issues, and will deliver substantial damages to millions of consumers who suffered individually modest losses. This validates the UK’s collective proceedings regime and may encourage similar actions in other jurisdictions.
As digital markets continue to evolve and regulatory frameworks develop, Kent v Apple will serve as a foundational precedent for competition law enforcement against digital platforms. Its nuanced treatment of IP rights, rigorous economic analysis, and practical approach to evidence and proof make it required reading for anyone working at the intersection of competition law and digital markets.
