How much for that app? U.S. top court hears Apple antitrust dispute

29 November, 2018, 07:22 | Author: Shawn Conner
  • Supremes listen to Apple anti-trust case

The class-action lawsuit in question accuses Apple of violating antitrust laws by monopolizing the market for iPhone apps and jacking up prices for those apps.

A report in the Seymour Chronicle said Chief Justice John Roberts was the only judge who appeared to be convinced by Apple's arguments which were made on Monday, seeking to shut down the anti-trust suit. A ruling against Apple, letting a lawsuit go forward, could add to pressure the company already faces to cut the 30%commission it charges on app sales.

"Apple's revolutionary App Store unleashed a wave of innovation in software development, providing consumers with unrivaled choice and access to services that previously did not exist", said a spokesperson in an emailed statement. While Apple argued that they lacked standing, with a lower court concurring, the case was revived by the 9th Circuit Court of Appeals who found that the plaintiffs did have standing to sue by virtue of being direct Apple customers.

"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". If the 30 percent commission affects those prices, he said, that's a matter between Apple and the developers.

iPhone apps are also only available through the App Store unless users "jailbreak" their phones, voiding the warranty. Today, the two parties will argue whether or not consumers are entitled to damages in antitrust cases, even when the goods were sold by third parties who actually set the prices.

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"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. Justice Elena Kagan explained that from her perspective, downloading an app is a one-step transaction with Apple. Roberts expressed concern that, for a single price increase, Apple could be held liable by both consumers and App developers. And now, Apple is asking the Supreme Court to overturn that decision.

Part of the concern, the court said in that case, was to free judges from having to make complex calculations of damages.

Apple is supported by President Donald Trump's administration. The states are led by Texas Attorney General Ken Paxton, a Republican, and Iowa Attorney General Tom Miller, a Democrat. What remains unclear is how many purchasers would qualify as plaintiffs, and how the law's triple damages for antitrust violations would be apportioned if Apple loses. An appeals court reversed the dismissal in 2017, leading to the Supreme Court taking up the matter.

The court will rule by June in the latest case, Apple v. Pepper, 17-204.

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