Apple vs Pepper: Supreme Court green-lights App Store monopoly lawsuit

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

While today's Supreme Court decision has not awarded any damages or determined guilt on the part of Apple, it does open Apple to potential litigation, most likely in the form of class-action lawsuits in the future. Apple argued that it was not a monopoly, rather a platform for app developers who can set their own prices. That suit will focus on Apple's rules that developers must sell their apps through its app marketplace, in addition to paying a 30 percent commission to Apple. Pepper class-action lawsuit was introduced by iPhone users in 2011, arguing that Apple has a monopoly on the iPhone apps market, because the Apple Store is the only place where such apps can be bought. Justice Brett Kavanaugh wrote the majority opinion that agreed the antitrust lawsuit can move forward in a lower court. Unlike Android, iOS customers can only get apps from that official source, which Apple says serves as kind of quality control to weed out security threats and apps that violate the company's terms of service. "We're confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric", the company said. It the losing side appeals, Mehta's accelerated schedule means an appellate court could get the case by summer, The Washington Post reports.

There has been exponential growth in the availability of apps since Apple created the App Store in 2008 with 500 choices. Democratic presidential candidate Elizabeth Warren has argued that big firms such as Facebook, Google and Apple should be broken up through antitrust enforcement. Critically, consumers pay Apple and the biz takes its cut before sending the remainder of the money to developers. Most apps are made by independent developers who have contracts with Apple. If consumers were harmed by high app prices, this occurred only because app developers were able to "pass on" Apple's 30 percent commission.

And Apple faces charges in Europe of abusing its platform by discriminating against rival apps, including one complaint from streaming music service Spotify.




Another Trump-appointed justice, Neil Gorsuch, dissented from the decision saying it's "not how antitrust law is supposed to work" because it gives a green light to types of cases that the court has previously prohibited. According to insiders, Apple intends to bring more app development in house and throw down the gauntlet to external developers who now create apps for the firm's devices.

Apple tried to have the case dismissed based on a legal precedent that says corporations cannot be sued by people who purchase goods or services indirectly.

But the mess of figuring out who can claim what, and how much, for what app in what timeframe when you are talking about tens of thousands of companies and millions of customers is not something that anyone really wants to contemplate right now.

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