Monday 13 May 2019 3:54 pm

US Supreme Court rules against Apple in App Store antitrust dispute

The US Supreme Court today gave the green light to a lawsuit on behalf of consumers, which accuses Apple of creating a monopoly on iPhone apps and forcing users to overpay with high commission fees.

In a 5-4 ruling, the Supreme Court upheld a decision to allow the class action to proceed. The customers argued Apple's requirement that all apps be sold through its App Store and its 30 per cent commission on all purchases were anti-competitive.

Apple shares have fallen more than five per cent in early trading.


The Cupertino tech firm said it was only acting as an agent on behalf of app developers, which set their own prices and pay Apple the commission charges. It argued the ruling could pose a threat to the e-commerce sector.

Explaining the ruling from the bench, Justice Brett Kavanaugh said: "Leaving consumers at the mercy of monopolistic retailers simply because upstream suppliers could also sue the retailers would directly contradict the longstanding goal of effective private enforcement in antitrust cases."

Dissenting from the decision, conservative Justice Neil Gorsuch, said that the decision is "not how antitrust law is supposed to work" because it gives a green light to the exact type of case that the court has previously prohibited.

An Apple spokesperson said: “Today's decision means plaintiffs can proceed with their case in district court. We’re confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric."

"Developers set the price they want to charge for their app and Apple has no role in that. The vast majority of apps on the App Store are free and Apple gets nothing from them. The only instance where Apple shares in revenue is if the developer chooses to sell digital services through the App Store," they added.

Noting that they pay Apple – not a developer – when they buy an app in the App Store, the iPhone users said they were the direct victims of the overcharges. Apple argued the consumers were indirect purchasers, because any overcharge would be passed on to them by developers.

Developers earned more than $26bn (£20bn) in 2017, a 30 per cent increase over 2016, according to Apple.


The suit, which was first filed in 2011, was supported by 30 state attorneys general, including from Texas, California and New York. Apple, which was backed by the Trump administration and the US Chamber of Commerce business group, sought to dismiss the case, arguing that the plaintiffs lacked the required legal standing to bring the lawsuit.

 

 

 

 

 

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