Supreme Court could allow suit over Apple iPhone apps’ sales


A victory for Apple could severely restrict consumers' ability to sue over antitrust violations even though Congress envisioned such lawsuits "would form a central component of enforcement of the antitrust laws", warned 18 scholars of antitrust law in a Supreme Court filing.

'Any matchmaking service that operates on the internet from DoorDash to Etsy is going to be subject to duplicative damages, ' said Marianela Lopez-Galdos, director of competition and regulatory policy at the Computer & Communications Industry Association, which backs Apple in the case.

"This is a critical question for antitrust law in the era of electronic commerce", Apple said at the time.

The suit by iPhone users could force Apple to cut the 30 percent commission it charges software developers whose apps are sold through the App Store.

The Supreme Court seemed ready Monday to allow an antitrust lawsuit to go forward that claims Apple has unfairly monopolized the market for the sale of iPhone apps.

Today marks the beginning of a legal battle that will determine the extent of control that can be exerted over a global product platform. Apple says it's more complicated, with the company serving as a middleman connecting app developers with users. However, the plaintiffs are backed by the attorneys general of 30 states including California, Texas, Florida and NY.

"When you're looking at the relationship between the consumer and Apple. there is only one step", she said.

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The lawsuit was initially dismissed because the commission is imposed on the developers, not the purchasers who are suing.

Apple claimed that its relationship is exclusively with an app developer, who it charges a commission, and that app purchasers buy directly from the developer. The average price of a paid app in the App Store is $1.

"Apple does not take ownership of third-party apps sold through the App Store, but instead acts as the developers' agent and completes the sales on their behalf", court documents state.

At points during the argument, Justices Neil M. Gorsuch and Kavanaugh appeared to agree.

Chief Justice John Roberts was the most supportive of Apple in his questioning.

The lawsuit said Apple violated federal antitrust laws by requiring apps to be sold through the company's App Store and then taking a 30 percent commission from the purchases. Since iPhone owners can only buy apps through the App Store without jailbreaking their phones and voiding their warranties, they want to be compensated for the damages incurred. But the San Francisco-based 9th US Circuit Court of Appeals revived the case a year ago, finding that Apple was a distributor that sold iPhone apps directly to consumers.

A ruling is expected in late spring. "Apple has put itself in the distribution chain, and it makes us deal with Apple in a way no one else does".