Apple Suffers Antitrust Case Defeat in Supreme Court

May 16, 2019, 01:23
Apple Suffers Antitrust Case Defeat in Supreme Court

Apple defended itself in the wake of the ruling.

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. The justices gave the go-ahead for the lawsuit in a close 5 to 4 ruling. But if the plaintiffs win at trial, Mark Rifkin, a lawyer representing them, said that "the overcharges paid by consumers since Apple's monopoly began will be measured in the billions of dollars".

"The case brings the most direct legal challenge in the USA to the clout that Apple has built up through its App Store".

An antitrust lawsuit against Apple would fundamentally disrupt not only the ecosystem of App Store but of other present and future electronic marketplaces.

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As per a report by CNBC, four iPhone users had sued Apple, alleging that the company illegally monopolises the distribution of apps for devices. "Yet today the court lets a pass-on case proceed".

"Along with Apple, the ruling was also a slap at the Trump administration, the U.S. Chamber of Commerce, and a raft of politically involved tech industry titans", King observed.

Apple had avoided much of the antitrust scrutiny faced by other technology firms including Facebook, largely by arguing that it does not have a dominant position in the many markets in which it operates, from smart phones and laptops to streaming music services.

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. So, according to the company, if anyone should be suing Apple, it should be the game developers themselves, not iOS users.

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While the latest ruling against Apple doesn't guarantee that a lawsuit against Apple can be won, users can definitely sue Apple for overcharging on app purchases. The developers of the software set the prices, so the company has only an indirect relationship to pricing. "The vast majority of apps on the App Store are free and Apple gets nothing from them".

Kavanaugh cautioned that the Apple case was at an early stage, and that the court was not assessing the merits of the plaintiffs' antitrust claims.

This issue originally started in 2011 when some iPhone users claimed that App Store prices would be lower in an open market. The suit is supported by 30 state attorneys general, including from Texas, California and NY.

The justices at the time ruled that the state could not bring an antitrust lawsuit against Illinois Brick because the state had not purchased concrete blocks directly from the company.

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After a federal judge in Oakland threw out the suit, the San Francisco-based 9th U.S. Circuit Court of Appeals revived it in 2017, finding that Apple was a distributor that sold iPhone apps directly to consumers.