Apple heading for Supreme Court showdown over iOS App Store 'monopoly' gripe

29 November, 2018, 07:20 | Author: Bennie Parsons
  • Case against Apple over app commission likely to proceed

Yesterday, we told you that the U.S. Supreme Court would be hearing arguments today on whether to allow a class action suit against Apple to proceed.

The company argues that because the app developers themselves set the price of apps in the App Store and not Apple, iPhone users are purchasing the apps from the developers directly. Although the average price of an app is just over a dollar, the App Store generated sales of about $11 billion in 2017 alone. "We are hopeful the Supreme Court will recognize Apple's critical role as a marketplace for apps, and uphold existing legal precedent by finding in favor of Apple and the millions of developers who sell their apps on our platform", the spokesperson said.

During arguments in a case that could have enormous consequences for the tech giant, justices across the ideological spectrum seemed to think consumers had the right to move forward with a fledgling class-action lawsuit saying Apple's App Store has an unfair monopoly that is raising the price of iPhone apps. Hovenkamp says that this case is different than typical antitrust cases.

Apple takes a 30 percent commission on the sale of apps, but it says any complaints about its pricing structure should come from developers, not consumers, since it's the developers who pay the commission.

But the lawsuit says the Cupertino, California-based company exerts a lot of control over the process, including a requirement that prices end in.99. He said both consumers and app developers should not be able to sue the company for the same alleged violation.

The app store is 'really unique, ' said Mark Rifkin, one of the lawyers pressing the suit.

The Justice Department is supporting Apple, although Solicitor General Noel Francisco acknowledged that Apple exploits its powerful position in the market by imposing the 30 percent commission. "From my perspective", she said, "I've engaged in a one-step transaction with Apple".

"Apple directed anticompetitive restraints at iPhone owners to prevent them from buying apps anywhere other than Apple's monopoly App Store", Frederick said. For 40 years, the courts have held that when there's an illegal monopoly, only the direct purchaser can sue for damages.

Apple is supported by President Donald Trump's administration.

The iPhone users, including lead plaintiff Robert Pepper of Chicago, have argued that Apple's monopoly leads to inflated prices compared to if apps were available from other sources. "The App Store has fueled competition and growth in app development, leading to millions of jobs in the new app economy and facilitating more than $100 billion in payments to developers worldwide". The San Francisco-based 9th US Circuit Court of Appeals a year ago revived the lawsuit, deciding that Apple was a distributor that sold iPhone apps directly to consumers.

The court will decide the case by late June.


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