Supreme Court allows monopoly lawsuit over iPhone apps

Jeannie Matthews
May 14, 2019

The Supreme Court is allowing consumers to pursue an antitrust lawsuit that claims Apple has unfairly monopolized the market for the sale of iPhone apps. They were joined by one of the court's five conservatives, Justice Brett Kavanaugh, who wrote the majority opinion.

"So if the commission is in fact a monopolistic overcharge, the developers are the parties who are directly injured by it. Plaintiffs can be injured only if the developers are able and choose to pass on the overcharge to them in the form of higher app prices that the developers alone control".

Ann Thai, senior product marketing manager of the App Store at Apple Inc., speaks during a company product launch event on March 25, 2019 in Cupertino.

The ruling may require Apple to pay hundreds of millions of dollars to developers and make changes to its App store, the Verge previously reported. It only ruled that lawsuits may go forward.

"The plaintiffs purchased apps directly from Apple and therefore are direct purchasers under Illinois Brick", Kavanaugh wrote in the majority opinion, citing the doctrine that prohibits indirect purchasers from suing companies for damages under antitrust law.

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A group of iPhone owners accusing Apple of violating U.S. antitrust rules because of its App Store monopoly can sue the company, the Supreme Court ruled Monday.

But Morgan Reed, president of ACT/The App Association, which represents 5,000 app makers and developers, said the ruling could open litigation floodgates. Engadget has reached out to Apple for comment.

Apple's pushback brought the matter to the Supreme Court, though only to decide whether the case can continue, not its final outcome. Following the ruling, Apple shares dropped by five percent - the stock was already under pressure due to the tariff dispute between the US and China.

We're proud to have created the safest, most secure and trusted platform for customers and a great business opportunity for all developers around the world. I suppose Apple's defense now could be that consumers already have a choice when it comes to where to buy apps: if you don't like it, you can always jump ship to Android. This could be a very expensive decision against Apple; plaintiffs who win an antitrust suit can be awarded three times the amount of the damages that they are asking for. In a 1977 ruling, the Supreme Court said that only these contractors-not the state itself-could sue Illinois Brick for its high prices. That may be coming to a head not just through Apple v. Pepper, but a European Commission investigation sparked by Spotify.

So what does this Supreme Court decision mean for those of us who buy apps in the App Store?

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