US Supreme Court Approves Antitrust Lawsuit Against Apple

Apple Shares Fall After Supreme Court Allows Consumer Lawsuit Over App Store

"The case brings the most direct legal challenge in the U.S. to the clout that Apple has built up through its App Store". The consumer plaintiffs claim Apple monopolized the market in violation of federal antitrust law by requiring that apps be sold through its App Store and extracting an excessive 30 percent commission on purchases. Apple takes a 30% cut from developers in the first year an app is on the app store, and 15% after that.

Apple's shares were down more than 5% to $186.79 in mid-afternoon trading.

The Cupertino, California-based technology company, backed by President Donald Trump's administration in the case, argued that it was only acting as an agent for app developers, who set their own prices and pay Apple's commission. The company argued that consequently only app developers, not consumers themselves, could not sue Apple. "The plaintiffs purchased apps directly from Apple and therefore are direct purchasers under Illinois Brick". Today's 5-4 Supreme Court ruling is just the beginning of the Apple antitrust lawsuit, as the Apple v Pepper Supreme Court case could also have major implications for other electronic marketplaces like Google Play and Facebook.

And Apple faces charges in Europe of abusing its platform by discriminating against rival apps, including one complaint from streaming music service Spotify.

The iPhone users argued that Apple would be under considerable pressure to lower the 30% commission in a competitive environment.

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Apple found itself on the losing side of a Supreme Court ruling in the Apple v Pepper case earlier this morning.

It is undisputed that the iPhone owners bought the apps directly from Apple.
The court in that case "held that an antitrust plaintiff can't sue a defendant for overcharging someone else who might (or might not) have passed on all (or some) of the overcharge to him", Gorsuch wrote. The case still needs to be heard by a court.

Apple in response claimed that iPhone users could not sue the company because they weren't purchasing Apple products directly from Apple.

As iPhone sales continue to tumble, Apple and its shareholders have been looking into improving the company's App Store revenues to compensate.

"Plaintiffs can be injured only if the developers are able and choose to pass on the overcharge to them in the form of higher app prices that the developers alone control", he wrote. The suit is supported by 30 state attorneys general, including from Texas, California and NY. Losing the antitrust lawsuit could result in Apple having to fork over hundreds of millions of dollars. According to this "Illinois brick doctrine", only direct purchasers of the products are entitled to sue for antitrust damages. Articles appear on euronews.com for a limited time.

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