On Monday, the United States Supreme Court will hear arguments in a lawsuit over Apple’s alleged app monopoly due to its App Store and app commission policies. Reuters reports the issue at hand pivots on Apple’s 30% cut of App Store sales. Apple previously requested the Supreme Court to throw out the antitrust lawsuit.
That commission is a key issue in a closely watched antitrust case that will reach the U.S. Supreme Court on Monday. The nine justices will hear arguments in Apple’s bid to escape damages in a lawsuit accusing it of breaking federal antitrust laws by monopolizing the market for iPhone apps and causing consumers to pay more than they should.
The justices will ultimately decide a broader question: Can consumers even sue for damages in an antitrust case like this one?
Apple is appealing a lower-court decision that revived the lawsuit after it had previously been dismissed. The Cupertino firm asserts that its practices are not monopolistic, citing a 1977 Supreme Court decision as the basis for its defense.
Apple has seized upon a 1977 Supreme Court ruling that limited damages for anti-competitive conduct to those directly overcharged instead of indirect victims who paid an overcharge passed on by others. Part of the concern, the court said in that case, was to free judges from having to make complex calculations of damages.
Apple is arguing that it is merely acting as an agent for developers who actually sell their apps to consumers via the App Store, and that they are not a distributor of the apps.
The lawsuit dates back to 2011, when a class-action lawsuit was filed on behalf of consumers saying Apple had created a monopoly by only allowing apps sold on the App Store to be installed on their devices. The lawsuit also claims Apple uses the monopoly to charge excessive commissions.
The lawsuit was originally thrown out in a federal court in Oakland, California. The court asserted that consumers were not direct purchasers. However, last year the 9th Circuit Court of Appeals in San Francisco revived the lawsuit, saying Apple indeed acts as a distributor, selling the apps directly to consumers.
The U.S. Chamber of Commerce business group backs Apple in the lawsuit, saying in a brief that, “The increased risk and cost of litigation will chill innovation, discourage commerce, and hurt developers, retailers and consumers alike.”
We’ll keep you posted on developments.
