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Comment: Apple isn’t price-gouging Brits – its post-Brexit app pricing is correct

There will be a lot of people complaining about price rises Apple just announced for apps and in-app purchases in the UK (along with India and Turkey). Once the price rises kick in over the next week, App Store prices will be literally pound for dollar.

But while some are complaining that Apple is price-gouging Brits, this isn’t actually the case …

The pound has fallen dramatically since Britain voted to leave the European Union, and the latest news that Prime Minister Theresa May pans to announce a ‘hard’ Brexit – leaving the internal market completely – saw a new fall today. As the Independent noted, this set a new 31-year low.

Sterling fell against all of its major peers, dropping below $1.1985 against the dollar in early Asian trade on Monday, before recovering slightly to just above $1.20 at market closing time.

This is a more than three-decade low for the currency, excluding the flash crash on 7 October that sent the pound plunging more than six per cent to $1.18.

So $1 today is worth £0.82.

That might still make it appear that Brits are getting a poor deal, but the factor many forget is that UK prices include VAT (sales tax) while U.S. prices don’t. So add 20% VAT to that equivalent 82p app price and it becomes 98.4p – in other words, Apple’s pound-for-dollar pricing means that Brits are paying almost exactly the same as their American counterparts.

So no, Apple isn’t price-gouging, and isn’t to blame for the price rise: Brexit is.

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Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!


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