Published: Thu, November 29, 2018
Tech | By Constance Martin

US top court leans toward allowing Apple App Store antitrust suit

US top court leans toward allowing Apple App Store antitrust suit

The Supreme Court heard a potentially significant antitrust case Monday to decide whether Apple can be sued for using its monopoly power over its iPhones to profit from the sale of apps. An illegal monopoly ruling would blow up a insane business.

"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. Although the consumers say they pay for the commissions through higher app prices, Apple says those are the type of "pass-through" damages barred under the Supreme Court's 1977 Illinois Brick v. Illinois ruling.

Though developers set the prices of their apps, Apple collects the payments from iPhone users, keeping a 30 percent commission on each purchase.

Apple iPhones are created to run only programs sold through its App Store.

This is against a group of iPhone owners who claim Apple forces them to overpay for apps by forbidding rivals to the App Store.

Apple has come under fire in the US by a group of iPhone owners who claim that the firn's monopoly on iPhone software amounts to a violation of the US Antitrust law.

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"The plaintiffs, as well as antitrust watchdog groups, said closing courthouse doors to those who buy end products would undermine antitrust enforcement and allow monopolistic behavior to expand unchecked".

If the customers succeed in their lawsuit it could be a big payday: Antitrust law allows seeking triple damages.

If Apple fails, the business model of the App Store, one of the company's fastest-growing and most profitable divisions, could be threatened, it added. Based on questions and comments made by the nine justices, Reuters says that the highest court in the land appears to be in favor of letting the suit proceed against Apple in lower court. Suppose, for example, that the only supplier in town for dry cleaning chemicals is overcharging. "If there's an antitrust issue, the drivers can bring a claim but passengers do not have standing". Only the dry cleaners can, because they're the direct buyers of the chemicals.

But Apple's critics say its control over the App Store makes it unlike other internet marketplaces. On that basis, a federal judge in San Francisco threw the lawsuit out, concluding that Apple didn't sell anything directly to iPhone consumers. An appeals court reversed the dismissal in 2017, leading to the Supreme Court taking up the matter. In allowing the suit, a federal appeals court said the transaction is a simple one in which consumers buy directly from Apple. In that case, the court ruled that damages for anti-competitive conduct can only be awarded to those who were directly overcharged, rather than indirect victims who paid an overcharge passed on by others.

Apple was backed by Republican President Donald Trump's administration.

A ruling is expected in late spring.

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