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iPhone owners can sue Apple over App Store prices, Supreme Court rules

iPhone owners can sue Apple over App Store prices, Supreme Court rules
[Photo: Claire Anderson/Unsplash]

Consumers can sue Apple over allegedly monopolizing the market for iOS apps, which they say raises prices, the Supreme Court ruled Monday.

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In a 5-4 ruling written by Justice Brett Kavanaugh, the court didn’t rule on whether or not Apple actually violates antitrust law or whether its App Store and commission system, where the company gets 30% of each app sale, actually affects prices.

Apple had argued that consumers aren’t entitled to sue, since prices are ultimately set by the developers building the apps, not Apple itself. A practical problem with Apple’s theory, wrote Kavanaugh, is that it could give “monopolistic retailers” a way to avoid being sued under antitrust law: They could simply arrange their transactions to be commissioned sales on behalf of manufacturers rather than direct sales of items they bought at wholesale, he argued.

“We decline to green-light monopolistic retailers to exploit their market position in that way,” wrote Kavanaugh, who was joined by the more liberal justices on the court. “We refuse to rubber-stamp such a blatant evasion of statutory text and judicial precedent.”

Apple didn’t immediately respond to an inquiry from Fast Company.

In a dissenting opinion written by Justice Neil Gorsuch, the court’s more conservative members called the ruling a break from precedent and warned that it could lead to complex litigation over who exactly played what role in setting prices for individual products.

“Will the court hear testimony to determine the market power of each app developer, how each set its prices, and what it might have charged consumers for apps if Apple’s commission had been lower?” Gorsuch wrote. “Will the court also consider expert testimony analyzing how market factors might have influenced developers’ capacity and willingness to pass on Apple’s alleged monopoly overcharge? And will the court then somehow extrapolate its findings to all of the tens of thousands of developers who sold apps through the App Store at different prices and times over the course of years?”

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