US Supreme Court allows anti-trust suit against Apple

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In a major blow to Apple, the US Supreme Court has ruled that consumers can pursue their anti-trust lawsuit and sue the company for forcing them to buy apps exclusively from it through its App Store.

The plaintiffs argued, however, that by taking a 30% commission on every app sale, Apple increased the price to the consumer of apps on the App Store.

The class-action lawsuit from 2011 maintains that Apple, which takes a 30 percent commission on app sales, abuses its monopoly position, resulting in higher prices.

Apple explained in the same statement that developers are the one that set the price for their apps or memberships and that they have no say in that particular decision.

"We're confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric", Apple said in statement issued in response to Monday's ruling.

The court also allowed iPhone users to sue Apple for any injury through an antitrust violation. Perhaps, Apple could go the Google way and enable app sideloading as Google does on Android. The court in that case "held that an antitrust plaintiff can't sue a defendant for overcharging someone else who might (or might not) have passed on all (or some) of the overcharge to him", Gorsuch wrote.

"Once you allow iPhone users to get apps elsewhere, the case disappears", he said.

Justice Brett Kavanaugh wrote for the majority, joining with the court's four liberal justices in the decision.

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John Lopatka, a professor of antitrust law at Penn State University, said the latest ruling does not address the merits of the lawsuit but adds to the pressure on companies like Apple.

The dispute hinged in part on how the justices would apply a 1977 Supreme Court precedent. The developers of the software set the prices, so the company has only an indirect relationship to pricing.

"Plaintiffs can be injured only if the developers are able and choose to pass on the overcharge to them in the form of higher app prices that the developers alone control", Gorsuch wrote.

The ruling threatens to throw another monkey wrench in Apple's efforts to increase the revenue generated from its app store at a time that its iPhone sales have plunged into their deepest slump since that revolutionary product hit the market 12 years ago.

The ruling could lead to other lawsuits against tech companies that act as platforms for other products or services.

The Illinois Brick decision "means that indirect purchasers who are two or more steps removed from the antitrust violator in a distribution chain may not sue", Kavanaugh said.

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. Apple had warned that this could pose a threat to e-commerce, a rapidly expanding segment of the US economy worth hundreds of billions of dollars in annual sales.