Supreme Court rules antitrust lawsuit against Apple can move forward

14 May, 2019, 02:43 | Author: Gerard Cortez
  • Apple is seen at a store in Zurich Switzerland

The four iPhone owners who kicked off the legal battle argue they have to pay higher prices because Apple is abusing its monopoly on apps on the iOS platform to impose unreasonable conditions on application developers.

For a bit of background here, the 9th U.S. Circuit Court of Appeals ruled in January 2017 that Apple sells its apps directly to consumers and that they can move forward with an antitrust suit on these grounds. This meant, for example, a consumer could sue a retailer, but not a wholesaler or a manufacturer of a product.

"It is undisputed that the iPhone owners bought the apps directly from Apple", Kavanaugh wrote. But if the plaintiffs win at trial, Mark Rifkin, a lawyer representing them, said that "the overcharges paid by consumers since Apple's monopoly began will be measured in the billions of dollars".

"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", Kavanaugh, who was recently appointed to the bench by President Donald Trump, wrote in the court's opinion.

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Dissenting from the decision, conservative Justice Neil Gorsuch, said the decision is "not how antitrust law is supposed to work" because it gives a green light to the exact type of case that the court had previously prohibited. But if plaintiffs ultimately succeed, it could not only force Apple to refund money the company collected from users over the last few years-it could also put pressure on Apple to open up the iOS platform, allowing users to install third-party software without paying Apple for the privilege.

"A claim that a monopolistic retailer (here, Apple) has used its monopoly to overcharge consumers is a classic antitrust claim", wrote Justice Brett Kavanaugh in the majority opinion, joined by the court's liberal justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan. Hence, if Apple was abusing its market power, only developers could sue. The group of plaintiffs argued that developers priced their apps higher than they otherwise would to account for Apple's commission.

Apple said that it was an agent for app developers and that it neither owned nor sold the apps itself. However, the Supreme Court disagreed, saying the company's legal arguments were neither "persuasive economically or legally". And because Apple doesn't allow app makers to distribute iPhone apps any other way, this behavior is doubly injurious as iPhone users have no other choices. It has said that if the court allowed the case to proceed, it would disrupt the e-commerce market.

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