US Supreme Court Approves Antitrust Lawsuit Against Apple

US Supreme Court Approves Antitrust Lawsuit Against Apple

In a major blow to Apple, the US Supreme Court has ruled that consumers can pursue their anti-trust lawsuit and sue the company for forcing them to buy apps exclusively from it through its App Store. According to the complaint, Apple's 30 percent "vig" on paid apps causes consumer direct harm as that cost is passed on to consumers by app developers.

Now, although the latest decision was merely a procedural win - Apple's lawyers had argued the case should be thrown out - the fact that the case will move forward could eventually have significant implications for the App Store.

Rifkin said he was gratified by the court's decision, which "reaffirmed the straightforward principle that consumers who purchase a monopolized product directly from the alleged monopolist may sue the monopolist to recover the full amount of the overcharge they are forced to pay by reason of the monopoly".

Kavanaugh was joined by liberal justices Ruth Ginsburg, Elena Kagan, Stephen Breyer and Sonia Sotomayor and the case must now go back to a lower court for trial.

An antitrust lawsuit against Apple would fundamentally disrupt not only the ecosystem of App Store but of other present and future electronic marketplaces.

Essentially, the Apple v Pepper case argues that Apple's 30% commission cut from developers in the App Store is unfair, and results in inflated prices for iOS users. Plaintiffs argue that this wouldn't be a problem if Apple had not imposed its ridiculously high 30 percent commission fee on apps using its platform.

The Supreme Court explains in the Opinion of the Court (linked above) that it's looking into the rights of consumers to sue Apple for this approach.

The case is Apple Inc. v. Pepper.

Apple said in its statement, "Developers set the price they want to charge for their app and Apple has no role in that".

Following the Supreme Court's decision announcement, Apple share prices plummeted by as much as 5.8 percent.

The dispute hinged in part on how the justices would apply a decision the court made in 1977 to the claims against Apple. Justices ruled that the plaintiffs could continue their case against the company. "The vast majority of apps on the App Store are free and Apple gets nothing from them". The counter-argument of the company, that app-pricing is an issue between the developers and the consumers, is shaky because a direct transaction occurs between the end-user and the electronic store during a purchase. "And it raises questions about how the company has wielded that power, amid a wave of anti-tech sentiment that has also prompted concerns about the dominance of other tech behemoths such as Facebook and Amazon", The New York Times reported on Monday.

The decision to allow the lawsuit to proceed could lead to billions of dollars in damages if Apple is found guilty.

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