Dr Rachael Kent v Apple [2024] CAT 5

Dr Rachael Kent brought collective proceedings against Apple Inc in the Competition Appeal Tribunal, alleging that Apple had abused its dominant position in the market for the distribution of iOS apps through the App Store. The claim contended that Apple’s 30% commission charged to app developers was excessive and anti-competitive, with the overcharge being passed on to consumers in the form of higher app prices. The proceedings were supported by third-party litigation funding, and following PACCAR, the funder restructured the LFA to adopt a multiplier-based return mechanism. Apple challenged the enforceability of the revised funding agreement, arguing that it constituted a DBA. The CAT considered the matter on 19 January 2024, the same day it delivered its decision in Alex Neill v Sony. Consistent with that ruling and applying the same analytical framework, the Tribunal held that the revised LFA was not a DBA within section 58AA. The funder’s return, being calculated as a multiple of capital committed rather than as a percentage of damages, fell outside the statutory definition.

The Tribunal rejected Apple’s submission that the economic effect of the arrangement was equivalent to a percentage-of-damages structure, holding that the legal characterisation of the agreement must be assessed by reference to its terms rather than its economic consequences. Apple was granted permission to appeal on the basis that the issue was of significant public importance and that there were compelling reasons for the matter to be considered by a higher court. The Kent v Apple case became one of the four conjoined appeals heard by the Court of Appeal in Sony v Neill [2025] EWCA Civ 841, where Lord Justice Flaux upheld the CAT’s approach. The decision in Kent was therefore subsumed into the broader appellate consideration of the enforceability of revised post-PACCAR LFAs.