Supreme Court Rules Against Apple, Allows Users to Sue Over Pricing


Apple did not immediately respond to a request for comment on the ruling. Apple takes a 30% cut of revenue generated through app sales in the App Store.

Apple said that it was an agent for app developers and that it neither owned nor sold the apps itself.

iPhone owners say Apple's 30 percent commission on sales made through the App Store results in developers passing that charge to consumers.

Apple tried to have the case dismissed based on a legal precedent that says corporations cannot be sued by people who purchase goods or services indirectly.

They argue that users have ended up paying "hundreds of millions of dollars more" for apps 'than they would have paid in a competitive market'.

But the court's majority wasn't persuaded that this justified abandoning the straightforward rule the high court articulated 40 years ago-that customers can sue their direct suppliers.

When I initially wrote up the case, I described Apple's argument as "confusing and counterintuitive". "We conclude that the answer is yes".

But dissenting Justice Neil Gorsuch suggested companies can easily insulate themselves from lawsuits going forward.

In a 5 to 4 ruling the Supreme Court came down on the side of the complainants, at least in regard to the relationship, saying "We disagree".

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"Our cases have consistently stated that direct purchasers from alleged antitrust violators may maintain a suit against the antitrust violators", Kavanaugh wrote in an official opinion.

Monday's ruling could imperil Apple's app marketplace and could have further implications for other large tech companies that may face lawsuits about allegations of monopolistic power. The App Association - again expressed disappointment Monday with the justices' ruling.

Or Apple could go against its control-freak corporate culture and adopt a Google-style semi-open approach where it has an app store but people can also download apps independently through a third-party website.

Justice Brett Kavanaugh, in the majority opinion, said when "retailers engage in unlawful anticompetitive conduct that harms consumers", people buying those companies' products have the right to hold the businesses to account.

Justice Neal Gorsuch - who, like Kavanaugh, was chosen for the Supreme Court by President Trump - wrote the dissent.

If consumers win their lawsuit against Apple, the court will need to estimate how much of Apple's 30 percent commission has been "passed on" to customers.

Apple sought to block the lawsuit, asserting that it had not set the prices on the apps and thus the iPhone owners had no standing to sue.

"No antitrust reason exists to treat these contractual arrangements differently, and doing so will only induce firms to abandon their preferred-and presumably more efficient-distribution arrangements in favor of less efficient ones", he continued.