Apple faces European class action

What does ESG mean in a digital economy dominated by tech giants? That question is at the heart of a case that has the potential to redefine corporate accountability in Europe. The class action lawsuit against Apple, currently pending before the CJEU[1], exemplifies this particularly at the intersection of social responsibility, consumer protection, and corporate governance.

Brought by two Dutch foundations – Stichting Right to Consumer Justice and Stichting App Stores Claims – the case questions whether a company like Apple can require consumers to exclusively use its App Store to purchase iOS apps, potentially leading to inflated prices and reduced consumer choice.

Apple’s Market Power on trial

Tech giant Apple is accused of abusing its dominant market position by restricting competition and inflating the prices of apps and in-app purchases. According to the Dutch foundations, Apple forces users in the Netherlands – and potentially in other EU member states – to use its App Store as the exclusive distribution channel for iOS apps. From an ESG perspective, this case raises pressing questions about whether companies such as Apple can be held accountable for the adverse social consequences of their business models, particularly where these involve price manipulation, harm to consumer interests and the suppression of competition.

Understanding how companies behave in markets where they hold monopolistic or dominant positions is essential from an ESG perspective. This case highlights the importance for corporate governance mechanisms that prevent the abuse of market power in ways that harm consumers and competitors. It also aligns with the growing demand for corporate social responsibility, which calls for companies to be accountable not only for their financial performance but also for the broader societal impacts of their operations.

While the lawsuit does not directly concern environmental matters, Apple’s business model may have indirect implications for environmental ESG objectives. For instance, as a global platform operator, Apple significantly influences the energy consumption of digital infrastructure. The choice of business models can affect the environmental footprint of cloud services, data centers, and product distribution, potentially compelling companies to adopt greener practices to reduce carbon emissions. In this regard, the CJEU’s jurisdictional ruling could have far-reaching implications for ESG strategies of companies operating across multiple legal systems with varying sustainability standards.

This case centers on Article 102 TFEU, which prohibits the abuse of dominant market positions – such as excessive pricing and anti-competitive restrictions. This provision reflects the principles of social justice embedded in ESG frameworks, emphasizing that companies must support fair markets and avoid exploiting their power. When a company is accused of abusing its market power through practices such as charging excessive commissions on app sales via a digital platform targeted an entire member state, Advocate General (AG) M. Campos Sánchez-Bordona suggests that the most appropriate connecting factor for determining the place where the damage occurred is the residence of the affected user. In this case, this means that Dutch consumers who claim to have paid higher prices for apps and in-app purchases through the Dutch version of Apple’s App Store can bring their claims before Dutch courts. The outcome of the CJEU’s ruling could therefore shape expectations for how firms within the EU are expected to engage with consumers and align their business practices with evolving ESG standards.

Class actions as an ESG Tool

From an ESG perspective, the opinion of AG M. Campos Sánchez-Bordona provides important clarification on the role of collective redress as a mechanism for promoting social justice in the digital economy. By confirming that representative actions brought by authorized foundations are to be treated equally to individual claims for the purpose of establishing international jurisdiction, the opinion affirms the legitimacy and legal standing of collective actions in cross-border disputes. This is particularly significant in cases involving digital platforms, where individual consumers often lack the resourses or incentive to pursue claims on their own.

The opinion also contributes to the advancement of the social pillar of ESG by endorsing legal pathways that enhance access to justice, reduce procedural inequality, and support the collective enforcement of consumer rights. By recognizing the place of residence of affected users as a valid connecting factor for determining where the harm occurred, AG M. Campos Sánchez-Bordona lowers jurisdictional barriers and facilitates meaningful consumer participation in legal processes.

In conclusion, these developments reflect a broader shift toward responsible governance in the digital market, where legal frameworks are increasingly expected to serve not only efficiency but also fairness and inclusivity. For businesses operating in the digital platform economy, this case may therefore serve as a benchmark for aligning operational practices with both regulatory obligations and growing societal expectations within the ESG landscape.