Apple Faces Supreme Court in App Store Monopoly Battle

WhatsApp and Facebook messenger icons are seen on an iPhone. Phil Noble Reuters  File

WhatsApp and Facebook messenger icons are seen on an iPhone. Phil Noble Reuters File

"The first sale is from Apple to the customer", said Justice Sonia Sotomayor, describing Apple's system as a "closed loop". Users who want to get around this restriction can "jailbreak" their device, but doing so voids their device's warranty with Apple.

At issue is whether Apple's walled garden approach to its iOS platform - in which developers are pretty much forced to sell their iPhone and iPad software exclusively via Cupertino's official App Store and pay Apple a 30 per cent cut - is artificially raising prices and a violation of United States antitrust laws on monopoly control.

"We are hopeful the Supreme Court will recognize Apple's critical role as a marketplace for apps, and uphold existing legal precedent by finding in favor of Apple and the millions of developers who sell their apps on our platform", Apple said in a statement on the trial. Judges could force it to change its pricing structure and Apple may face hundreds of millions in penalties to refund some of the commission it has taken in the past four years. I go to Apple's App Store.

The lawsuit was initially dismissed because the commission is imposed on the developers, not the purchasers who are suing. Developers earned more than $26 billion in 2017, a 30% increase over 2016, according to Apple.

The question was whether consumers have the right to sue Apple directly for overcharges, or whether their beef is with app developers who pass along Apple's 30 percent commission and insistence that prices end in $0.99. They describe the iPhone as akin to a shopping mall where consumers can freely shop for apps and buy what they choose.

If the customers succeed in their lawsuit it could be a big payday: Antitrust law allows seeking triple damages.

Justice Brett Kavanaugh said if consumers are paying more than they should, then perhaps they should be able to sue. Justice Stephen Breyer, who used to teach antitrust law at Harvard Law School, said the consumers' case seemed straightforward and in line with a century of antitrust law.

India Furious With Pak; Officials Harassed, Kept Away From Sikh Pilgrims
Sidhu had claimed that the Pakistan army chief had told him about "making efforts to open the Kartarpur corridor". The ties between the two countries had strained after the terror attacks by Pakistan-based groups in 2016.

Apple claimed that its relationship is exclusively with an app developer, who it charges a commission, and that app purchasers buy directly from the developer.

When a user buys an app, Apple collects the money, keeps the 30%commission and gives the rest to the developer. Its argument: the company is merely providing a marketplace for the apps.

Consumers 'pay the monopoly prices for apps directly to Apple through its App Store, ' the lawyers wrote in their Supreme Court brief. "Apple can't point to another e-commerce distributor that does what it does", Frederick said.

Chief Justice John Roberts was the most supportive of Apple in his questioning.

Today the Justices sat through an hour of hearings from both sides and offered some comments on the matter afterward.

The case is Apple Inc. v. Pepper, and it will be decided sometime in 2019.

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