USA court allows consumer lawsuit on Apple marketplace monopoly

Supreme Court rules Apple will face antitrust suit for its iPhone apps

Apple iPhone owners can now sue for monopoly abuse if they feel they have been overcharged when buying an app for their phone, after the US Supreme court sided with consumers in a landmark ruling.

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.

Ed Black of the Computer & Communications Industry Association, a trade group, said the ruling opens up digital platforms to liability for their role as "matchmaker companies" than connect consumers with services.

Since the iPhone owners that sued purchased apps directly from Apple they "therefore are direct purchasers under Illinois Brick".

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Apple argues that consumers shouldn't be able to sue, citing an earlier ruling, which argues that "indirect purchasers" can't sue a company for antitrust damages. What's more, Apple has far-reaching discretion over products in its store, and may remove apps for any reason whatever. The majority decision was reached by Justice Brett Kavanaugh, joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan.

Apple had tried to argue that it acted exclusively as an agent for developers. He also addressed Apple's claim that they do not set app prices by pointing out that the company's practice of charging app developers $99 per year plus 30 percent of sales indeed affects pricing.

The lawsuit was brought against Apple by four iPhone users, who claimed that Apple was monopolizing the retail market for the sale of apps and using that monopoly to force higher-than-competitive charges for its apps.

The Apple Inc. v. Robert Pepper case dates back to 2011.

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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". The core of Apple's argument is that, while it maintains the App Store, the prices for apps within it are set by developers.

Apple's stock fell 5.3% on the news.

Regardless, this means that, since it's no longer considered an intermediary, consumers can pursue the case against Apple. He said he would have overturned a lower court's decision that allowed the case to proceed, arguing the majority had imposed a "senseless" rule that courts will find impossible to implement and companies will find easy to evade.

iPhone users who must purchase software for their smartphones exclusively through Apple's App Store filed the suit.

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