Supreme Court OKs Antitrust Lawsuit Against Apple’s App Store Practices

Lloyd Doyle
May 13, 2019

Variety reports that the Supreme Court has made a ruling against tech giant Apple in a recent case, allowing a class-action lawsuit which alleges that Apple's App Store is a monopoly to go ahead. A judge could triple the compensation to consumers under antitrust law if Apple ultimately loses the suit.

It isn't just paid apps or in-app purchases that make pricing decisions to account for Apple's decision.

The app market is a tightly-controlled system. iPhones are programmed so they can not download apps outside the Apple-administered App Store, and users who modify their devices to download apps from other sources - called jailbreaking - risk adverse consequences like voiding their warranty.

"Apple's theory would provide a roadmap for monopolistic retailers to structure transactions with manufacturers or suppliers so as to evade antitrust claims by consumers and thereby thwart effective antitrust enforcement", Kavanaugh wrote.

The plaintiffs, including lead plaintiff Robert Pepper of Chicago, filed the suit in a California federal court in 2011, claiming Apple's monopoly leads to inflated prices compared to if apps were available from other sources.

According to statistics portal Statista, US customers spent $46.6bn (£36bn) on a combination of in-app purchases, subscription and premium apps in 2018. In that case, the court limited damages for anti-competitive conduct to those directly overcharged rather than indirect victims who paid an overcharge passed on by others.

The case is Apple Inc. v Pepper, 17-204.

We have reached out to Apple for comment and will update this story with any response.

The court has not declared Apple monopolists yet, but this ruling does allow the case to proceed. It has moreover claimed that by paying its commission, developers are "buying a package of services which include distribution and software and intellectual property and testing".

"The problem is that the 30 percent commission falls initially on the developers", Gorsuch wrote.

A district court decision had said that the iPhone users did not have standing to bring their antitrust claim because the developers - not Apple - are the ones selling the apps.

Other reports by Iphone Fresh

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