United States court allows consumer lawsuit on Apple marketplace monopoly

Supreme Court rules Apple will face antitrust suit for its iPhone apps

Supreme Court rules Apple will face antitrust suit for its iPhone apps

The customers argued Apple's requirement that all apps be sold through its App Store and its 30 per cent commission on all purchases were anti-competitive. Because Apple requires all in-app purchases to be conducted through the App Store, developers automatically lose out on 30 percent, which is why some developers have tried to buck the App Store.

"Apple's line-drawing does not make a lot of sense, other than as a way to gerrymander Apple out of this and similar lawsuits", Justice Brett Kavanaugh wrote, adding later that if the court adopted Apple's reasoning, it would amount to "a how-to guide for evasion of the antitrust laws".

The ruling threatens to throw another monkey wrench in Apple's efforts to increase the revenue generated from its app store at a time that its iPhone sales have plunged into their deepest slump since that revolutionary product hit the market 12 years ago.

Today's ruling, Gorsuch said, could begin whittling away the decision in Illinois Brick and may also call other, older cases into question.

Apple's stock tumbled nearly six percent after the ruling, but it is hardly the end of its financial concerns in the matter.

It's the structure of the App Store which is stinging Apple here.

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Apple had avoided much of the antitrust scrutiny faced by other technology firms including Facebook, largely by arguing that it does not have a dominant position in the many markets in which it operates, from smart phones and laptops to streaming music services.

Apple has said the consumers were indirect purchasers, at best, because any overcharge would be passed on to them by developers. Either way, the App Store isn't going to go away, but we may get more ways to install new software on iOS devices. The plans include a new Books app to rival Audible on the Apple Watch, and to make changes to the stock keyboard to allow users to swipe across letters on the keyboard to type words - a direct challenge to third-party apps such as SwiftKey. "But Apple asserts that the consumer plaintiffs in this case may not sue Apple because they supposedly were not "direct purchasers" from Apple under our decision in Illinois Brick Co. v. Illinois, 431 U". The Ninth Circuit argued that Illinois Brick's precedent only prevented consumers from suing alleged monopolists that are two or more steps removed in a vertical distribution chain.

Apple could of course be forced to open up its payment processing to competition and app developers would be able to choose which one to go with. Current antitrust laws allow the plaintiffs to recover three times the amount of damages.

Regardless, this means that, since it's no longer considered an intermediary, consumers can pursue the case against Apple.

"The problem is that the 30 percent commission falls initially on the developers", Gorsuch wrote. One of Apple's arguments to the Supreme Court was effectively that a decision against it would create such a clusterfuck of claims that it wasn't in anyone's interests to move forward.

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