The United States Supreme Court is allowing an antitrust lawsuit, Apple v. Pepper, to go ahead, which claims the company drives up app prices…
The Supreme Court is letting an antitrust lawsuit against Apple proceed, and it’s rejected Apple’s argument that iOS App Store users aren’t really its customers.
The Supreme Court upheld the Ninth Circuit Court of Appeals’ decision in Apple v. Pepper, agreeing in a 5-4 decision that Apple app buyers could sue the company for allegedly driving up prices.
US Supreme Court Allows Apple v. Pepper Antitrust Lawsuit to Proceed
Apple had claimed that iOS users were technically buying apps from developers, while developers themselves were Apple’s App Store customers.
“Apple’s line-drawing does not make a lot of sense, other than as a way to gerrymander Apple out of this and similar lawsuits,” wrote Justice Brett Kavanaugh.
Its decision could have larger ramifications for customers who want to sue any app seller for antitrust violations, and it sets the stage for a major battle between Apple and some angry customers.
Apple v. Pepper claims requiring iOS users to purchase apps through its official App Store and charging developers a 30 percent commission, Apple is adding a mandatory fee that developers necessarily pass right on to customers.
“A claim that a monopolistic retailer has used its monopoly to overcharge consumers is a classic antitrust claim. But Apple asserts that the [iOS users] in this case may not sue Apple because they supposedly were not ‘direct purchasers'” Kavanaugh wrote.
“We disagree. The plaintiffs purchased apps directly from Apple and therefore are direct purchasers.” In the original Illinois Brick case, a court ruled that a brick manufacturer couldn’t be sued by someone who paid a separate contractor to build a structure with those bricks.
“iPhone owners are not consumers at the bottom of a vertical distribution chain who are attempting to sue manufacturers at the top of the chain.” Apple, Kavanaugh’s ruling concluded, was simply using rhetorical tricks to claim it wasn’t a direct seller – and those tricks could let other companies evade legitimate antitrust claims.