US top court leans towards allowing Apple App Store antitrust suit

Apple,iPhone app fees,Apple iPhone App Fee Lawsuit

Apple,iPhone app fees,Apple iPhone App Fee Lawsuit

The US Supreme Court on Monday is hearing arguments from Apple that call into question who can bring an antitrust case against the company: app developers or App Store customers.

The justices are involved because they have to settle a broader question: Can consumers even sue for damages in an antitrust case like this one?

In its defense, Apple said the company plays no role in setting an app's price; that decision is up to the app's developer.

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 behaviour to expand unchecked.

"A lot of tech platforms will start making the argument that consumers don't have standing to bring antitrust suits against us", said Sandeep Vaheesan, legal director for the Open Markets Institute, a Washington-based antitrust advocacy group.

"Uber could say, we're just providing communication services to ride-sharing drivers".

Apple has a hand in dictating the price software developers can charge for their apps - the price must end in US$0.99 - and it charges the developers a 30 per cent commission on their products, which must be sold exclusively through the App Store.

But, he said, "the only reason consumers are harmed here in the form of paying higher prices is because the app-makers decide to increase their prices in order to recoup that commission".

"But the point is that this closed loop with Apple as its spoke, they are the first purchaser of that 30 percent markup".

Apple has sought to dismiss the case without a jury trial saying that the device owners have no standing to sue, as iOS developers are the ones who choose to do business with Apple and set their own prices.

"As a result, iPhone owners paid Apple more for apps than they would have paid in a competitive retail market".

The Supreme Court will rule on whether or not the case is allowed to go ahead. The app developers could overcharge for the apps to make up for Apple's 30 percent cut.

The company said allowing the lawsuit to proceed would be unsafe for the e-commerce industry, which increasingly relies on agent-based sales models. The Trump administration is backing Apple at the high court. The plaintiffs were backed by 30 state attorneys general, including from Texas, California and NY.

The claims against Apple date to 2011 when several iPhone buyers including lead plaintiff Robert Pepper of Chicago filed a class action lawsuit against Apple in federal court in Oakland, California. That 1977 precedent limited damages for anti-competitive conduct to those directly overcharged rather than indirect victims who paid an overcharge passed on by others.

Yesterday, we told you that the U.S. Supreme Court would be hearing arguments today on whether to allow a class action suit against Apple to proceed.

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