Apple and Google under fire: UK think tank urges tougher action to boost British innovation

Apple and Google’s App Store fees could be draining billions from the UK economy, according to a leading UK think tank

A new report from the Institute for Public Policy Research (IPPR) urges the government to give greater powers to the Competition and Markets Authority (CMA) to curb the market dominance of tech giants like Apple and Google.

The IPPR says the duopoly over app stores is stifling UK startups and costing the economy up to £2.4 billion a year.

The report pulls no punches, claiming Apple and Google’s tight control over app stores and in-app payment systems is suppressing competition, stalling innovation, and holding back UK businesses.

Now, the think tank is calling on the government to give the CMA more firepower to take on Big Tech and level the playing field.

Dr George Dibb, associate director for economic policy at IPPR and the report’s author, said:

‘Enforcing the UK’s competition rules isn’t anti-business – it’s a pro-business, pro-worker, pro-growth agenda. 

‘If we weaken those rules, we’re letting dominant firms and tech giants hold back innovation and investment.’

The report lands as the UK awaits a landmark ruling in the first major legal test of Apple’s dominance. 

Consumer rights champion and academic at Kings College London Dr Rachael Kent is leading a £1.5 billion class action against the tech giant, accusing Apple of charging excessive fees on its App Store and seeking compensation for millions of UK consumers.

The cost of Apple and Google’s stranglehold

Developers are required to pay Apple or Google commissions of up to 30% on in-app purchases – a rate the IPPR says far exceeds what’s fair in a healthy, competitive market. 

While small developers may qualify for a reduced 15% rate, around 90% of all revenue still gets hit with the full fee.

According to IPPR estimates, this could mean the two tech giants will earn between £1.5 billion and £2.4 billion in UK app store revenues in 2025 alone. And with gross profit margins between 75% and 100%, the cost to developers isn’t going toward meaningful infrastructure or support.

‘That’s money being extracted from British businesses and workers, and funnelled to monopolistic firms, often overseas,’ said Dr. George Dibb.

The IPPR says that in a more competitive ecosystem – like PC gaming, where commissions average around 12% – up to £1.4 billion in revenue could be redirected to app developers. That number could rise to £3.3 billion by 2029, providing a huge boost to UK tech, jobs, and regional economies.

Apple and Google face rising pressure from UK consumer lawsuits

Beyond regulators and policymakers, UK consumers themselves are now taking Apple and Google to court.

• A collective legal claim led by Dr Rachael Kent is currently awaiting judgment. The case argues that Apple has overcharged millions of UK iPhone users via its App Store practices.
  
• Another major collective action against Google, brought by consumer rights expert Liz Coll, is scheduled to go to trial in October 2026. This claim seeks compensation for Android users allegedly affected by similar anti-competitive behavior.
  

These are not isolated cases. Multiple consumer group action claims are now underway against both Apple and Google in the UK, reflecting growing frustration among users over unfair digital practices and lack of choice.

It’s not anti-business, it’s pro-growth

The IPPR argues that effective competition policy isn’t about punishing success – it’s about ensuring innovation can thrive. Far from being anti-business, it says stronger regulation is crucial to support entrepreneurs, workers, and small firms.

“Enforcing the UK’s competition rules isn’t anti-business—it’s a pro-business, pro-worker, pro-growth agenda,” said Dr. Dibb.

The think tank also dismisses the idea that deregulation is a shortcut to economic growth. Instead, it urges the government to empower the CMA with:

• Faster interventions against exploitative pricing by tech platforms and energy firms
  
• A formal ‘growth mandate’ to tackle practices that suppress wages and hurt small and medium enterprises (SMEs)
  
• Smarter integration of competition policy with wider industrial and trade – especially in the UK’s net-zero transition

Growing consensus that now is the time to act

With pressure mounting from regulators, economists, and now millions of UK consumers in court, the case for reform is clearer than ever. From politicians to entrepreneurs, voices across the spectrum are lining up behind the IPPR’s message.

‘Competition is the lifeblood of free enterprise and healthy businesses,’ said Lord Andrew Tyrie, former chair of the CMA. ‘We don’t have enough of it… The CMA has recently been given huge new powers. It now needs to deploy them—and vigorously.’

Meanwhile, small business leaders say the dominance of tech giants is stifling entrepreneurship. 

‘We welcome the push to champion SME dynamism over incumbent protection,’ said Craig Beaumont of the Federation of Small Businesses (FSB). ‘Done right, competition policy is pro-entrepreneurialism.’

Competition regulator’s investigations into Apple and Google

The CMA is currently investigating Apple and Google’s mobile ecosystems, with a focus on app store practices. Provisional findings are expected later this year, and could mark a turning point in how digital markets operate in the UK.

A CMA spokesperson said: ‘The digital markets competition regime… unlocks our ability to tackle unfair practices online, promoting effective competition and delivering the growth this country needs.’

What should you do next if you’re an Apple customer?

Dr Kent has estimated that ‘more than 20 million consumers could have paid the price of Apple’s abuse of dominance.’ 

Dr Kent has said any Apple customer who made purchases in the UK App Store on an iPhone or iPad between 1 October 2015 and 15 November 2024 could be in line for compensation.

This includes paid apps, subscriptions, and in-app purchases for digital content or goods. It applies to both consumers and businesses based in the UK during this period.

Register with Consumer Voice today so we can tell you if the claim against Apple App Store is won, and if Apple owes you.