Antitrust, the App Store, and Apple

“Yesterday the Supreme Court held a hearing in the case Apple Inc. v. Pepper. ‘Pepper’ is Robert Pepper, an Apple customer who, along with three other plaintiffs, filed a class action lawsuit alleging that App Store customers have been overcharged for iOS apps, thanks to Apple’s 30% commission that Pepper alleges derives from Apple’s monopolistic control of the App Store,” Ben Thompson writes for Stratechery. “There are three points to make about this case, and they are captured in the title:”

• First, the specific antitrust doctrine at question
• Second, the question of whether the App Store is a monopoly
• Third, what the very existence of these questions say about Apple

“In my estimation, these three points move from less certain to more certain, and from less important to more important,” Thompson writes. “In other words, whatever the Supreme Court decides matters less than what the very existence of this case says about the state of Apple and its future.”

“If I am right, and the case is dismissed because the plaintiffs do not have standing, that does not mean Apple and the App Store are out of the antitrust hot water: first, developers can sue for antitrust damages, and second, most states — including California — do not follow the Illinois Brick precedent (this dual antitrust regime was upheld by the Supreme Court in California v. ARC America Corp),” Thompson writes. “There is a decent chance the question of whether or not the App Store and Apple’s associated policies are an antitrust violation [will make its] way to court sooner or later.”

Read more in the full article here.

MacDailyNews Take: This has already been and will continue to be a long saga.

Some points, as we wrote in August 2013:

First: One would assume that a large corporation such as Apple would have had competent legal advice when they set up their App Store, in order that it be set up in legal fashion.

Second: On every iPhone, iPod touch, iPad, and iPad mini box, the potential buyer is informed of requirements, including “iTunes X.x or later required for some features” and also that an “iTunes Store account” is required. The plaintiffs were informed of the requirements prior to purchase. If the plaintiffs didn’t like the terms that came along with Apple devices, they should have opted for a pretend iPhone from any one of a dime-a-dozen handset assemblers. Then they could blissfully infest their fake iPhones with malware from a variety of sources.

Third: Apple doesn’t set the prices for paid apps.

Fourth: The amount by which Apple Inc. has driven down software prices across the board, on every major computing platform, makes legal actions such as this eminently laughable.

Trump administration backs Apple in U.S. Supreme Court over App Store antitrust suit – November 26, 2018
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


  1. I would like to know of a retailer, online or brick and mortar, that does not mark up the price of the items they sell. If they don’t, then they can not exist. 30-40 percent is normal retail mark up. Anybody complaining about Apple’s 30% is an idiot.

  2. This particular case may be dismissed, but eventually someone will succeed in breaking up the App Store on the same grounds. Amazon, perhaps, the big winner in the ebooks case.

    Once the App Store is broken up, malware will start appearing for iOS, everyone will start recommending anti-virus software for iOS, and app prices will go up.Hurray for US courts, another big win for consumers. :-\

    Let’s face it, US courts have been biased against Apple for decades.

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