US top court leans toward allowing Apple App Store antitrust suit


That relationship makes Apple the proper target of an antitrust lawsuit, they said.

Lawyers for the consumers urged the high court to allow the lawsuit to proceed.

At issue is whether Apple's walled garden approach to its iOS platform - in which developers are pretty much forced to sell their iPhone and iPad software exclusively via Cupertino's official App Store and pay Apple a 30 per cent cut - is artificially raising prices and a violation of United States antitrust laws on monopoly control.

A federal district judge initially ruled in Apple's favor, but a panel of the U.S. Court of Appeals for the 9th Circuit in San Francisco overruled that decision past year and held that consumers were direct purchasers of iPhone apps. "The App Store provides a safe, secure and trusted storefront for customers to find apps from across the globe that enrich and ease their lives".

The case in question, Apple Inc. v. Pepper, won't actually address the heart of the issue, rather it is merely for the Supreme Court to decide IF the case should be allowed to make its way up through lower level courts first.

The lawsuit was initially dismissed because the commission is imposed on the developers, not the purchasers who are suing.

If Apple fails, the business model of the App Store, one of the company's fastest-growing and most profitable divisions, could be threatened, it added. The plaintiffs want Apple to open up iOS so apps can be installed from sources other than the App Store.

Liberal justices Sonia Sotomayor and Stephen Breyer seemed certain that the iPhone buyers' claims should go forward.

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"The harm to the consumers here is that they have to pay higher prices for apps", Francisco said, because "Apple controls the pipeline that connects app makers on the one hand and iPhone users on the other".

An appeals court revived the case in January 2017, and the Supreme Court in June said it would take up Apple's claim that only app developers and not consumers have legal ground to bring such an antitrust suit.

The justices are involved because they have to settle a broader question: Can consumers even sue for damages in an antitrust case like this one? The company's lead Supreme Court lawyer, Dan Wall, declined to discuss the case in advance of the argument.

Only Chief Justice John Roberts suggested clear support for Apple.

"They happen to be the largest company in the world, or at least they were some weeks ago, and they are able to extract monopoly pricing by virtue of a unique e-commerce monopoly on their App Store", said Frederick. Both sides spoke for about an hour in total.

But consumers, he said, "are suing only for the damages that we incur".

"What we know is what the price is in a noncompetitive market, and we will have to have experts that will assess what the damages would be in a competitive market", he said.