Google faces £1.2bn UK court battle over excessive app store fees

Google is preparing to defend itself in a UK court against a massive £1.2 billion lawsuit accusing the search giant of overcharging millions of consumers on its app store.

The class-action legal challenge focuses on the commissions Google charges for app downloads and in-app purchases through its Play Store. Critics argue that the company's dominant position allows it to extract unfair fees that are ultimately passed on to ordinary mobile phone users.

The high-stakes trial arrives at a moment of intense political and regulatory scrutiny for the mobile market. Writing in The Guardian, Labour MP Chi Onwurah, who chairs the Commons science, innovation and technology committee, warned that British consumers are paying an invisible "app tax" that is stifling domestic tech businesses and draining household budgets.

The cost of the 'app tax'

Both Google and Apple control the platforms that run at least 90% of UK mobile devices. Onwurah said this effective duopoly allows the Silicon Valley giants to impose a commission of up to 30% on digital subscriptions, games, and software purchases.

Because there are no viable alternative app marketplaces on iPhones, and few practical workarounds on Android, developers have little choice but to accept these conditions.

This lack of competition directly hurts consumers. Research commissioned by the Coalition for App Fairness suggests that British consumers hand over roughly £700 million every year to Apple and Google through these fees. That figure is £232 million more than both tech firms paid in UK corporation tax last year combined. For a household with four smartphone users, it is the equivalent of an annual £55 charge built into the price of their digital purchases.

Calling time on voluntary deals

Beyond high commissions, both companies have historically restricted developers from telling users about cheaper purchasing options elsewhere—a practice known as "steering."

While Parliament passed the Digital Markets, Competition and Consumers Act in 2024 to grant the Competition and Markets Authority (CMA) stronger powers to tackle this behaviour, Onwurah argued that the regulator has been too soft. She accused the watchdog of accepting "weak, voluntary commitments" rather than imposing legally binding orders on the tech firms.

The CMA is currently weighing a crucial decision on steering rules. "Many are rightly nervous that this could end up with another voluntary gesture, rather than a binding rule," Onwurah warned, calling on the government to back the regulator in taking a much tougher line.

The legal battle ahead

While regulators consider their next steps, the courts will now scrutinise Google’s fees directly. The £1.2 billion lawsuit claims that Google’s pricing model is anti-competitive and has directly inflated the cost of apps for British consumers.

Google has previously defended its charging structure, maintaining that its fees are fair and support the security, infrastructure, and global distribution network it provides to Android developers. But with a multibillion-pound trial ahead, the company will have to convince a UK competition tribunal that its tight grip on mobile transactions is justified.