“U.S. Supreme Court justices on Monday appeared open to letting a lawsuit proceed against Apple Inc that accused it of breaking federal antitrust laws by monopolizing the market for iPhone software applications and causing consumers to overpay,” Andrew Chung reports for Reuters. “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.”
“The case may hinge on how the justices apply one of the court’s past decisions to the claims against Apple,” Chung reports. “That 1977 precedent limited damages for anti-competitive conduct to those directly overcharged rather than indirect victims who paid an overcharge passed on by others.”
“Apple was backed by Republican President Donald Trump’s administration,” Chung reports. “Some liberal and conservative justices sharply questioned an attorney for Apple and U.S. Solicitor General Noel Francisco, who argued on behalf of the administration on the company’s side, over their argument that the consumers were not directly affected by purchasing the apps from Apple. Liberal Justice Elena Kagan, explaining how an App Store purchase is handled, said, ‘From my perspective, I’ve just engaged in a one-step transaction with Apple.'”
“Conservative Chief Justice John Roberts’ questions suggested he agreed with Apple’s position. Roberts expressed concern that, for a single price increase, Apple could be held liable by both consumers and App developers,” Chung reports. “Apple, also backed by the U.S. Chamber of Commerce business group, has argued that a ruling siding with the iPhone users who filed the lawsuit would threaten the burgeoning field of e-commerce, which generates hundreds of billions of dollars annually in U.S. retail sales.”
“Liberal justices Sonia Sotomayor and Stephen Breyer seemed certain that the iPhone buyers’ claims should go forward,” Chung reports. “The company sought to have the antitrust claims dismissed, arguing that the plaintiffs lacked the required legal standing to bring the lawsuit. A federal judge in Oakland threw out the suit, saying the consumers were not direct purchasers because the higher fees they paid were passed on to them by the developers. The San Francisco-based 9th U.S. Circuit Court of Appeals revived the case last year, finding that Apple was a distributor that sold iPhone apps directly to consumers.”
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MacDailyNews Take: The U.S. Supreme Court should uphold existing legal precedent by finding in favor of Apple which is not a distributor that sells iPhone apps directly to consumers. App developers sell iPhone apps directly to consumers.
Setting aside the security implications, the Ninth Circuit decision should be overturned simply because Apple’s App Store customers are the app developers, not the app consumers.
Apple owns the shopping mall. The developers pay Apple for space within. The end customer buys their apps from the developers. Indirect purchasers of goods or services along a supply chain cannot seek remedies over antitrust claims.
Apple defends App Store fees in U.S. Supreme Court – November 26, 2018
Apple defends App Store fees as U.S. Supreme Court weighs consumer suit – November 23, 2018
Apple wants U.S. Supreme Court to undo previous decision regarding an antitrust suit – October 31, 2018
U.S. Supreme Court will decide if Apple’s App Store is an anti-competitive monopoly – June 19, 2018
U.S. Supreme Court to consider Apple appeal in antitrust suit over App Store prices – June 18, 2018
US DOJ sides with Apple over App Store antitrust allegations in Supreme Court brief – May 10, 2018
9th U.S. Circuit Court of Appeals revives antitrust lawsuit against Apple – January 13, 2017
Apple App Store antitrust complaint dismissed on procedural grounds by U.S. judge – August 16, 2013