US Supreme Court to hear Apple's appeal in App Store monopoly case

Carly Page
@CarlyPage_
26 November 2018

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THE US SUPREME COURT will this week hear Apple's appeal to throw out a seven-year-old antitrust case related to the iOS App Store.

As reported by Reuters, Apple is appealing a lower court decision that revived the proposed consumer class-action lawsuit - known - known as Apple vs Pepper - citing a 1977 Supreme Court ruling as part of its defence

In Apple's view, siding with the consumers who filed the lawsuit would "threaten the burgeoning field of e-commerce", and it argues that

The case dates back to 2011 when several iPhone buyers, including lead plaintiff Robert Pepper (not Robot Pepper), filed a lawsuit claiming that Apple "illegally monopolized the distribution of iPhone apps, and that the commissions charged to app developers inflate the prices consumers ultimately pay for apps."

The plaintiffs argued that, although developers set the prices of their apps, by charging them a 30 per cent commission on each purchase, and by allowing iOS apps only to be sold through its App Store, Apple has inflated the price of apps for consumers.

A court initially ruled in favour of Apple, ruling that the plaintiffs did not have legal standing to bring the case because they are not charged the commission.

An appeals court revived the case in January 2017, and the Supreme Court in June said it would take up Apple's claim that only app developers and not consumers have legal ground to bring such an antitrust suit.

"This is a critical question for antitrust law in the era of electronic commerce," Apple said at the time. "The threshold issue is who may seek damages based on allegedly anticompetitive conduct by Apple that allows it to charge excessive commissions on apps distribution: the app developers, the plaintiff consumers, or both?"

Apple, supported by the Trump administration, argues that the plaintiffs in the case don't have the right to sue under current antitrust laws in the US.

"The Ninth Circuit is home to a disproportionate share of the nation's e-commerce companies, and its erroneous decision creates uncertainty and a lack of uniformity about the proper application of Section 4 (awarding treble damages based on the antitrust law) to this increasingly common business model," it said.

It's not just consumers who have a problem with the iOS App Store, as Spotify has also hit out at Apple's "anti-competitive" practices, in particular the 30 'Apple Tax' it levies on developers. µ