US Supreme Court allows suit against Apple to proceed

Suit alleges Apple monopolizing app store sales in violation of antitrust law

The U.S. Supreme Court ruled 5-4 Monday to allow a lawsuit by a group of Apple iPhone users to proceed against the tech giant.

The suit claims Apple monopolized app sales on its proprietary App Store by using its control of its critical online storefront to charge higher-than-competitive prices. Apps cannot otherwise be legally acquired on devices that run Apple’s iOS operating system.

Justice Brett Kavanaugh wrote for the majority, joining with the court’s four liberal justices in the decision.

“The plaintiffs seek to hold retailers to account if the retailers engage in unlawful anticompetitive conduct that harms consumers who
purchase from those retailers,” he wrote. “That is why we have antitrust law.”

In so doing, the justices disagreed with Apple’s defense, which sought to portray the company as a mere intermediary between consumers and app developers.

The plaintiffs argued, however, that by taking a 30% commission on every app sale, Apple increased the price to the consumer of apps on the App Store.

“The plaintiffs’ allegations boil down to one straightforward claim: that Apple exercises monopoly power in the retail market for the sale of apps and has unlawfully used its monopoly power to force iPhone owners to pay Apple higher-than-competitive prices for apps,” Kavanaugh wrote, denying the existence of an intermediary between Apple and app consumers.

“The iPhone owners purchase apps directly from the retailer Apple, who is the alleged antitrust violator. The iPhone owners pay the alleged overcharge directly to Apple. The absence of an intermediary is dispositive,” he added.

The decision, however, does not decide the merit of the plaintiffs’ claims, instead allowing the case to proceed in lower courts.

Shares of Apple stock were down some 5.85% in mid-day trading following the decision.

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