Published: Thu, November 29, 2018
IT | By Emmett Cole

Apple in Supreme Court to block customers from suing for monopoly abuse

Apple in Supreme Court to block customers from suing for monopoly abuse

A hot potato: The App Store might be considered a monopoly and could be forced to make changes depending on the ruling of Apple v. Pepper by the Supreme Court.

"Apple's intentionally closed system prevents competition", said David Frederick, who is a lawyer representing the customers filing the class-action lawsuit.

"A lot of tech platforms will start making the argument that consumers don't have standing to bring antitrust suits against us", said Sandeep Vaheesan, legal director for the Open Markets Institute, a Washington-based antitrust advocacy group.

"Uber could say, we're just providing communication services to ride-sharing drivers". Under this long-standing legal doctrine, customers who bring in their laundry can not sue.

The company argues that because the app developers themselves set the price of apps in the App Store and not Apple, iPhone users are purchasing the apps from the developers directly.

Apple takes a 30 percent commission on the sale of apps, but it says any complaints about its pricing structure should come from developers, not consumers, since it's the developers who pay the commission.

Apple claimed that its relationship is exclusively with an app developer, who it charges a commission, and that app purchasers buy directly from the developer.

'Apple is a sales and distribution agent for developers, ' Apple's lawyers said in a Supreme Court filing.

The case has bounced around the lower courts for several years.

"The Ninth Circuit is home to a disproportionate share of the nation's e-commerce companies, and its erroneous decision creates uncertainty and a lack of uniformity about the proper application of Section 4 (awarding treble damages based on the antitrust law) to this increasingly common business model", its brief read. Apple cited companies like ticket site StubHub, Amazon's Marketplace and eBay.

However, a few of the justices expressed some skepticism with Apple's arguments.

E-commerce reached $452 billion in United States retail sales in 2017, according to USA government estimates.

The Trump administration is siding with Apple. The plaintiffs are backed by the attorneys general of 30 states including California, Texas, Florida and NY.

The plaintiffs and some anti-monopoly groups disagree. 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.

The iPhone users, including lead plaintiff Robert Pepper of Chicago, filed the suit in a California federal court in 2011, claiming Apple's monopoly leads to inflated prices compared to if apps were available from other sources.

But the San Francisco-based 9th U.S. Circuit Court of Appeals revived the case a year ago, finding that Apple was a distributor that sold iPhone apps directly to consumers.

Like this: