US Supreme Court Give Go Signal For Apple Antritrust Case To Proceed

Supreme Court rules Apple will face antitrust suit for its iPhone apps

A divided U.S. Supreme Court on Monday gave the go-ahead to an antitrust lawsuit accusing Apple Inc of forcing consumers to overpay for iPhone software applications, a decision that could lead to billions of dollars in damages and put at risk the company's lucrative way of selling apps.

Essentially, the Apple v Pepper case argues that Apple's 30% commission cut from developers in the App Store is unfair, and results in inflated prices for iOS users.

"The plaintiffs' allegations boil down to one straightforward claim: that Apple exercises monopoly power in the retail market for the sale of apps and has unlawfully used its monopoly power to force iPhone owners to pay Apple higher-than-competitive prices for apps", Kavanaugh wrote, denying the existence of an intermediary between Apple and app consumers.

"Developers set the price they want to charge for their app and Apple has no role in that".

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Apple is also under scrutiny by Dutch antitrust authorities over complaints about commissions in European markets.

FILE- In this May 31, 2018, file photo customers enter the Apple store in NY.

To protect its interest, Apple has referred to a precedent ruling that was established by the Supreme Court in 1977. The court in that case "held that an antitrust plaintiff can't sue a defendant for overcharging someone else who might (or might not) have passed on all (or some) of the overcharge to him", Gorsuch wrote. Google, on the other hand, allows users to sideload apps with the help of an APK if they wish to not download software from the Google Play Store.

The issue is further worsened by Apple's decision not to impose the same fees on its own apps. "But Apple asserts that the [Apple users] in this case may not sue Apple because they supposedly were not 'direct purchasers'".

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Now the Supreme Court decision raises the specter of the legal dominoes falling in a way that could require Apple to slash its commissions or even abandon them.

A dissenting opinion written by Justice Neil Gorsuch and joined by other conservatives on the court agreed with Apple's argument that developers, not the company, sell to consumers and that the lawsuit is based on "pass-on" liability. "The vast majority of apps on the App Store are free and Apple gets nothing from them".

The ruling threatens to throw another monkey wrench in Apple's efforts to increase the revenue generated from its app store at a time that its iPhone sales have plunged into their deepest slump since that revolutionary product hit the market 12 years ago. But Apple asserts that the consumer plaintiffs in this case may not sue Apple because they supposedly were not "direct purchasers" from Apple under our decision in Illinois Brick Co. v. Illinois, 431 U.

As CNN notes, the ruling could be a factor for other tech companies that control online stores.

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