U.S. Supreme Court allows antitrust suit against Apple over App Store; AAPL slides 5%

“The U.S. Supreme Court on Monday gave the go-ahead for a lawsuit by consumers accusing Apple Inc of monopolizing the market for iPhone software applications and forcing them to overpay, rejecting the company’s bid to escape claims that its practices violate federal antitrust law,” Andrew Chung reports for Reuters. “Apple shares were down about 5% after the justices, in a 5-4 ruling, upheld a lower court’s decision to allow the proposed class action lawsuit to proceed.”

“Conservative Justice Brett Kavanaugh, an appointee of President Donald Trump, joined the court’s four liberal justices to rule against Apple and wrote the decision,” Chung reports. “Apple shares were trading down $10 at 187.13 by late morning.”

“The company, backed by the Trump administration, argued that it was only acting as an agent for app developers, who set their own prices and pay Apple’s commission,” Chung reports. “The dispute hinged in part on how the justices would apply a decision the court made in 1977 to the claims against Apple. In that case, the court limited damages for anti-competitive conduct to those directly overcharged rather than indirect victims who paid an overcharge passed on by others.”

“Noting that they pay Apple – not an app developer – whenever buying an app from the App Store, the iPhone users who brought the case said they were direct victims of the overcharges. Apple said the consumers were indirect purchasers, at best, because any overcharge would be passed on to them by developers,” Chung reports. “Dissenting from the decision, conservative Justice Neil Gorsuch, said that the decision is “not how antitrust law is supposed to work” because it gives a green light to the exact type of case that the court has previously prohibited. Gorsuch also was appointed by Trump.”

Read more in the full article here.

MacDailyNews Take: Again, we think the ultimate ending to this legal challenge will be that developers will be able to accept payments in their apps without being forced to give Apple a cut or as much of a cut as today.

Companies that currently are large enough to work around Apple and send users to their own sites for payment include Amazon and Netflix. Apple will likely need to end this practice and allow all developers to allow users to subscribe to services, buy ebooks, etc. within their apps without a 15%-30% fee. A smaller fee may be tenable, as Apple does have costs to run the App Store, of course. We’ll see after the legal gears grind glacially and eventually spit out their end results.

By the way: 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.

Note also that Apple doesn’t set the prices for paid apps.

Lastly, 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.

Supreme Court rules against Apple in App Store antitrust case – May 13, 2019
Antitrust, the App Store, and Apple – November 27, 2018
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. MDN…
    Not good enough. Developers should be able to sell the fruits of their labor in a channel of their choosing. Either that, or Apple codes all Apps or purchases the source code outright.

    Oh… and… “I told you so!”

  2. DJIA drops another 700 points.

    Who owns this economy? Oh yeah. Because slow stable growth is so bad, this is waaaaaaay greater. Mmmmm Hmmm, Tell me when America is great again, please.


      1. Doc: watch what? I will patiently wait for you to teach us how belligerent arrogant braggadocio as an excuse for competent fiscal and economic policy will help anyone in the short term or long term. What’s the end game? Is the US choosing to play chicken with a nation 4 times its size and expecting to survive the crash? Is Trump mistakenly thinking that playing poker will reveal some weakness in China’s game face? Is the US consumer supposed to accept months if not years of ratcheting tit-for-tat tariffs that as you well know are targeted at specific industries and companies that cannot tolerate the disruptions? As a doctor, you may be insulated from the pain. I doubt the working class that Trump pretends to care about can do the same. A rise in cost of living of just a few percent will more than wipe out any tax breaks that Trump supporters were bragging about last year. Hope they saved it, they will need it now.

        Don’t pretend that Cook is going to absorb the costs in order to display his patriotism. He outsourced everything to China, how much patriotism do you really think he has?

      2. Still happy with your dumbass isolationist president, doc? Businesses big and small are getting screwed by a president who wants no people or goods to cross any national borders… except to import wives, golf in Scotland, or go money grubbing with Russian oligarchs in a vain attempt to make Trump Hotel Moscow. The damage done by this idiot will hurt Americans for decades. Nice big increase to the federal debt too. Does Trump realize he can’t just stiff lenders, declare the US bankrupt and start over?

      1. Explain why you think this is so.

        Look, I totally agree that the USA should be leading a trade war with China. However that is different from what Trump is doing. Trump has declared Canada, Mexico, and the EU to be trade enemies of the US. He’s put zero effort into understanding how the WTO works or could be improved. He is apparently incapable of rallying any other nations to join the US in this crusade. The US is isolated, and it has a lot more to lose than China does. When China finds a substitute for US goods, the quality might go down but the price of grain from elsewhere will be no greater on average. If — and that’s a very BIG if — the US is able to find a substitute for Chinese suppliers for all the consumer goods it buys, the price will rise. How long would it take Apple to shift production from China to an tariff-free location? Do you know?

        A nation addicted to cheap Walmart and Amazon pricing, which buys 9 android phones for every iPhone because of initial purchase price — durability and quality is apparently not important. These American consumers will be shocked in a couple months when the pricing is finally passed down to them.

        In case you haven’t noticed, the US, now turning away inexpensive labor at the border and with a low natural birth rate, is following Japan and Europe in becoming relatively old and relatively less productive. What does the US do better than anyone else? Wall Street financial games and litigation. Manufacturing, not so much. Guys like Cook outsourced all the hard work decades ago.

        China has already found other nations from which to buy fruit, wheat, soybeans, and other US goods. Trump’s proposed answer to a collapse in farming in the US is welfare.

        There are certainly some products that only the US can provide, but those are not as numerous as you might think. Sophisticated long term contract industrials, great, that’ll keep the bottom from falling out for a while. However it takes only one delay for one Chinese part to shut down an auto plant.

        Can you name anything made in the USA that doesn’t have a substitute built elsewhere? I’ll wait for your answer.

        1. Some valid points there Mike. Although I wouldn’t say turning back illegals at the border is a bad thing for any country. Also…as a Canadian…the shit show in our trade issue has been almost totally created by the personal (and childish) virtue signaling of our useless PM Trudeau. But ultimately, China gets away with too much. Some parity must ensue…as they need the US economy as well.

    1. USA as a country is going down and China up. It does not matter how arrogant the POTUS and his subordinates act trying to coerce everybody, e.g. China, Iran, Venezuela, Europe, Turkey, etc..into doing their wishes. The empires fall all the time. And they try to resist by the use of force and threat.

  3. “Tell me when America is great again, please.”

    It improved millions of times once we got rid of the Obamanation.

    Great Orators of the Democratic Party

    “The only thing we have to fear is fear itself.”
    ~Franklin D. Roosevelt

    “The buck stops here.”
    ~Harry S. Truman

    “Ask not what your country can do for you; ask what you can do for your country.”
    ~John F. Kennedy

    But wait …There are more great orators of the Democratic Party

    MORE RECENT GEMS of wisdom:

    “It depends what your definition of ‘is’ is?”
    ~William Jefferson Clinton

    “Those rumors are false. I believe in the sanctity of marriage”
    ~John Edwards

    “What difference does it make?” (re: Benghazi)
    ~Hillary Clinton

    “I invented the Internet.”
    ~Al Gore

    “America is, is no longer, uh, what it, uh, could be, uh, what it was once was, uh, and I say to myself, uh, I don’t want that future, uh, for my children.”
    ~Barack Obama

    “I have campaigned in all 57 states.”
    ~Barack Obama (Quoted in 2008)

    “You don’t need God anymore; you have us Democrats.”
    ~Nancy Pelosi (Quoted in 2006)

    “Paying taxes is voluntary”
    ~Sen. Harry Reid

    “Bill is the greatest husband and father I know. No one is more faithful, true, and honest than he is.”
    ~Hillary Rodham-Clinton (Quoted in 1998)

    “You have a business, you didn’t build that. Someone else did!”
    ~Barack Obama (Quoted in 2012)

    And the most ridiculous gem of wisdom, from the “Mother Superior of STUPID”:

    “We just have to pass Obama’s Healthcare Bill to see what’s in it.”
    ~Nancy Pelosi (Quoted March in 2010)

    Beyond a doubt, the greatest statement of all was made by Democrat House Speaker Sam Rayburn at the first Congressional session after
    Ted Kennedy was caught, on camera, having sex with one of his aides on the deck of his yacht

    “Ah see that the good Senatuh from the great state of Massutwoshits has changed his position on off-shore drillin’.”


    “My fear is if North Korea nukes us, Trump is gonna get us into a war.”
    Maxine Waters……2017

    I am adding Nancy Pelosi’s most recent quote: “You need to vote for the Democrats otherwise the illegal aliens will lose their rights”

    And with this new batch of stupid in the house you will soon be able to add many more to the list start with Ocasio-Cortez

    “We are all born ignorant, but one must work very hard to remain STUPID!”
    Benjamin Franklin~ (1706-1790)

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