Supreme Court takes on Apple antitrust case - Mobile World Live

Supreme Court takes on Apple antitrust case

19 JUN 2018

The US Supreme Court agreed to consider a question of whether current antitrust laws leave Apple in the firing line in a lawsuit regarding pricing of App Store apps.

A lawsuit brought by several plaintiffs headed by iPhone owner Robert Pepper focuses on whether Apple can be held accountable for effectively artificially inflating the price of apps sold through its App Store rather than developers.

The case could have wide-reaching ramifications for the vendor and other big-name companies.

Court documents explain electronic marketplaces including the App Store pose a condundrum to a legal precedent set in the late 1970s. At the time, the model set held only immediate victims (“direct purchasers”) of anticompetitive conduct could claim damages rather than “indirect purchasers”.

The plaintiffs argue Apple’s practice of taking a 30 per cent commission on all app sales and requirement apps are only sold through App Store could have prompted developers to up their fees.

While a lower court initially dismissed the plaintiffs’ case based on the original precedent, this was subsequently overturned. The latter decision, thus, poses the question of whether “consumers may sue for antitrust damages anyone who delivers goods to them, even where they seek damages based on prices set by third parties who would be the immediate victims of the alleged offence,” the Supreme Court stated.

High stakes
In a petition to the Supreme Court Apple said: “This is a critical question for antitrust law in the era of electronic commerce.”

“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?”

Depending on the Supreme Court’s decision, Apple could face damages claims totalling in the millions of dollars.

Companies operating a similar electronic marketplace model including Amazon and eBay could also be left open to similar suits, Financial Times noted.

Earlier this month Apple’s CEO said it paid out almost $30 billion to iOS app developers since June 2017, bringing total money paid to them to $100 billion since the App Store launched in 2008.

Forbes reported the company earned around $11 billion in App Store commissions in 2017.

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Saleha Riaz

Saleha joined Mobile World Live in October 2014 as a reporter and works across all e-newsletters - creating content, writing blogs and reports as well as conducting feature interviews...More

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