Supreme Court Rules Against Apple in App Store Monopoly Lawsuit

Supreme Court Rules Against Apple in App Store Monopoly Lawsuit

Troy Powers
May 14, 2019

The developers, who also have to pay a $99 annual membership fees and set their own price on the apps, then pass the expenses on to consumers, Pepper argued.

The Supreme Court justices ruled 5-4 that a class-action lawsuit filed by consumers can proceed, the Washington Post reported.

The Ninth Circuit, however, said that Apple is indeed the seller, through their App Store.

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.

The Supreme Court ruled Monday that iPhone users can bring an antitrust lawsuit against Apple alleging the tech giant has monopolized the market for software applications. 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.

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.

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A spokeswoman for Apple could not immediately be reached for comment.

"Apple's line-drawing does not make a lot of sense, other than as a way to gerrymander Apple out of this and similar lawsuits", Justice Brett Kavanaugh wrote in the majority opinion. Apple had argued that a Supreme Court ruling allowing the case to proceed could pose a threat to e-commerce, a rapidly expanding segment of the US economy worth hundreds of billions of dollars in annual sales. Apple also claimed that because they don't set the retail price of the apps on the store, iPhone users can not sue them.

"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.

"It is undisputed that the iPhone owners bought the apps directly from Apple", Kavanaugh wrote.

They claim that this puts Apple in breach of anti-trust laws.

Apple's store is far from the only one that takes a cut from developers.