Apple Suffers Antitrust Case Defeat in Supreme Court

Posted May 16, 2019

Apple now does not impose the same levies on its own apps; a practice which some software companies allege gives the tech firm an unfair advantage and a monopoly on its own platform.

In the Apple Supreme Court case, Justice Kavanaugh, along with four other Justices, disagreed with Apple and ruled against the company, saying that since Apple users purchase their apps directly from Apple, that makes Apple responsible to those customers.

FILE- In this May 31, 2018, file photo customers enter the Apple store in NY.

Now, although the latest decision was merely a procedural win - Apple's lawyers had argued the case should be thrown out - the fact that the case will move forward could eventually have significant implications for the App Store. Apple, backed by the Trump administration, argued that it was only acting as an agent for app developers, who set their own prices and pay Apple's commission.

"A claim that a monopolistic retailer (here, Apple) has used its monopoly to overcharge consumers is a classic antitrust claim".

To protect its interest, Apple has referred to a precedent ruling that was established by the Supreme Court in 1977. Apple had argued that a Supreme Court ruling allowing the case to proceed could pose a threat to e-commerce, a rapidly expanding segment of the USA economy worth hundreds of billions of dollars in annual sales.

Dissenting from the decision, conservative Justice Neil Gorsuch, said the decision is "not how antitrust law is supposed to work" because it gives a green light to the exact type of case that the court had previously prohibited.

The recent ruling also comes from complaints that Apple App Store is the only way users can install an app on an iPhone or iPad.

Apple in response claimed that iPhone users could not sue the company because they weren't purchasing Apple products directly from Apple.

"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", he wrote. The app store is the only place iPhone users can download apps.

"At the least, the ruling is likely to make the companies involved in those online outlets rethink and probably revise the way payments are made and managed", he told TechNewsWorld. They were supported by 30 state attorneys general, including from Texas, California and NY.

Lead plaintiff Robert Pepper of Chicago filed the suit in a California federal court in 2011.

Apple, also backed by the U.S. Chamber of Commerce business group, had sought to dismiss the case, arguing the plaintiffs lacked the required legal standing to sue.

But even a reduction in the commission rate could deliver a financial blow that would even damage a company as profitable as Apple. Articles appear on for a limited time.