US Supreme Court rules against Apple, allows App Store-related antitrust lawsuits

The SC decision could add to pressure Apple to cut the 30% commission it charges on app sales.

The US Supreme Court today ruled against Apple stating that iPhone users could sue Apple for antitrust violations related to the App Store.

As per a report by CNBC, four iPhone users had sued Apple, alleging that the company illegally monopolises the distribution of apps for devices. According to the complaint, Apple’s 30 percent “vig” on paid apps causes consumer direct harm as that cost is passed on to consumers by app developers.

Apple in response claimed that iPhone users could not sue the company because they weren’t purchasing Apple products directly from Apple. Instead, Apple is simply a third party that sits between the users and the app makers.

The US Supreme Court disagreed with what Apple had to claim. This will allow the suits to go forward, and they could result in hundreds of millions of dollars in damages or maybe even more, if and when more claimants come on board.

US Supreme Court rules against Apple, allows App Store-related antitrust lawsuits

Consumers say Apple uses dominance to overcharge app buyers.

“Apple’s alleged anticompetitive conduct may leave Apple subject to multiple suits by different plaintiffs,” the Court noted in its ruling.

Rejecting Apple’s defense, Justice Brett Kavanaugh wrote, “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."

“In particular, we fail to see why the form of the upstream arrangement between the manufacturer or supplier and the retailer should determine whether a monopolistic retailer can be sued by a downstream consumer who has purchased a good or service directly from the retailer and has paid a higher-than-competitive price because of the retailer’s unlawful monopolistic conduct. As the Court of Appeals aptly stated, ‘the distinction between a markup and a commission is immaterial’,” Kavanaugh added.

The latest decision by the Supreme Court does appear to be merely a procedural win, but the fact that the case will move forward could eventually have significant implications for the App Store.

As pointed out by The Verge, if Apple does eventually lose this case, the company could have to repay anyone who was been “overcharged” thanks to its App Store markup.

In a statement to the publication, Apple defending its App Store ecosystem said, “Today’s decision means plaintiffs can proceed with their case in District court. We’re confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric."

"The App Store is not a monopoly by any metric,” a spokesperson says. “We’re proud to have created the safest, most secure and trusted platform for customers and a great business opportunity for all developers around the world.”

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