advertisement
advertisement

iPhone users take on Apple over app prices at the Supreme Court

iPhone users take on Apple over app prices at the Supreme Court
[Photos: Flickr user Tim Sackton; raphaelsilva/Pixabay]

After nearly a decade of legal battles, Apple is headed to the U.S. Supreme Court today to defend its 30 percent commission on app sales. The justices will hear arguments in Apple Inc. v. Pepper, over whether the tech giant can be forced to pay damages to iPhone owners who believe the App Store is an unlawful monopoly that jacks up prices.

Whether or not Apple has a monopoly over the App Store it invented is not the subject of the dispute. Instead Robert Pepper and the other iPhone owners in the class-action lawsuit have an issue with the 30 percent commission that Apple takes on app sales. They claim that high an amount is akin to price gouging–raising fees on apps that are then passed on to consumers. Since iPhone owners can only buy apps through the App Store without jailbreaking their phones and voiding their warranties, they want to be compensated for the damages incurred. Apple, naturally, does not want to pay.

UPDATE 1:40 EST: The Associated Press reports that the Supreme Court sounds open to the idea of allowing the class action suit alleging an Apple monopoly over iPhone app sales to go forward. During oral arguments Monday morning, only Chief Justice John Roberts sounded ready to side with Apple, the AP reports. Apple argued that it is merely an intermediary between third-party developers and app buyers, not a direct seller. That distinction matters because a 1977 Supreme Court ruling held that under federal antitrust law only direct purchasers of a product can collect damages for overpricing.

In 2014,  the complaint against Apple was dismissed, but in early 2017, the Ninth Circuit Court of Appeals reversed that decision and Apple Inc. v. Pepper was back on. Now, Apple is petitioning the Supreme Court to throw the case out, again. Today, the two parties will argue whether or not consumers are entitled to damages in antitrust cases, even when the goods were sold by third parties who actually set the prices.

While the ruling won’t be made for a while, if the Supreme Court throws out the case, it will be business as usual for Apple. If the Supreme Court upholds the Ninth Circuit’s decision, though, it will send the case back to a lower court, where the case will keep going; Apple will have to fight to avoid being forced to pay out hundreds of millions of dollars to consumers and perhaps even changing its App Store model.

What’s more, if the court finds that Apple can be sued over third-party products, it could open the door for similar class action suits against companies like Amazon and eBay and any marketplace where third parties sell products.

advertisement
advertisement