U.S. Supreme Court leans toward allowing Apple App Store antitrust suit

Case against Apple over app commission likely to proceed

Case against Apple over app commission likely to proceed

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

Apple has denied it engaged in anti-competitive behaviour, saying the prices for apps were set by app developers.

But the company says the popularity of software for iPhones and its App Store shouldn't obscure that consumers buys apps from developers, not Apple.

Plaintiffs acting on behalf of iPhone customers argued that because Apple chooses what apps can be sold, gives developers a limited pricing structure and forces iPhone owners to use the App Store, it is operating anti-competitively.

Consumers 'pay the monopoly prices for apps directly to Apple through its App Store, ' the lawyers wrote in their Supreme Court brief. "Indirect purchasers may be better suited to enforce the antitrust laws", Gorsuch said.

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

Can you imagine what would happen if the judges had to go ahead with the prosecution and Apple lost?

Justice Elena Kagan made similar comments.

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"I really wonder whether, in light of what has happened since then, the court's evaluation stands up", Alito said.

Justice Brett Kavanaugh, another conservative Trump appointee, pushed back against Francisco's contention that Apple's actions are not the direct cause of higher prices for consumers, because app makers set the final prices.

"Apple's intentionally closed system prevents competition", says David Frederick, a lawyer representing the customers, "which enables the App Store to collect a higher price than if Apple were forced to entice app seekers in a competitive market". And iPhone apps are only available through the App Store. At that time, Judge Yvonne Rogers ruled in favor (PDF) of Apple, reasoning that end users of the applications were indirect customers are therefore could not be the ones to sue under United States antitrust law.

The seven plaintiffs in the case Apple v. Pepper have filed four antitrust class-action complaints against Apple since 2011.

App Association President Morgan Reed said the appeals court misunderstood the relationship between developers and platforms, improperly looking at platforms as distributors that buy from vendors and resell to customers, rather than as conduits that simply connect the two.

Apple has the support of the Justice Department, which argues that Apple is simply providing a marketplace for app consumers. When software developers offer their products, Apple reviews them for compatibility and malware and, once they are approved, charges the developer a 30 percent commission.

In other words, "they're subject to suit on both sides of the market for a single antitrust price increase that they're alleged to have imposed", Roberts said.

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