Apple will today (26 November) defend its App Store activities against a court ruling which opened the way for consumers to sue the vendor for monopolising the market.
The US Supreme Court is due to hear Apple’s bid to overturn an appeal court’s ruling the company effectively forced iPhone owners to use its App Store by limiting download options. The decision enabled consumers to seek legal recourse against Apple, which the company said posed a threat to the wider e-commerce industry, Reuters reported.
A legal challenge was filed in 2012 by a group of iPhone users which argued Apple was acting anti-competitively by not allowing consumers to purchase apps outside the App Store, a move which also led to higher prices.
Apple’s defence was that it merely rents out space to developers, which give it a cut of their revenue in return, and that users purchase apps from developers not the tech giant.
The iPhone maker also cited a 1977 Supreme Court ruling which limited damages for anti-competitive behaviour to those directly overcharged (in this case app developers) rather than victims (app users).
Lawsuits such as this one could “lead to the quagmire this court sought to avoid,” Apple said in a legal brief to the nine justices which will scrutinise the case.
For and against
The US Chamber of Commerce business group supported Apple, stating: “The increased risk and cost of litigation will chill innovation, discourage commerce, and hurt developers, retailers and consumers alike.”
However, the plaintiffs and competition watchdog groups believe preventing consumers from suing companies in such cases would mean monopolistic conduct could go unchecked. They argued developers would not want to sue Apple for fear of being banned, which would mean no one is left to challenge anti-competitive actions.
The plaintiffs are backed by the attorney generals of 30 states including California, Texas, Florida and New York.