Supreme Court could allow suit over Apple iPhone apps’ sales

Case against Apple over app commission likely to proceed

The Supreme Court signaled Apple could face a revived antitrust lawsuit over its price control of the iPhone and iPad App Store.

'The party first and directly injured by an alleged overcharge has the entire damages claim, ' Apple argued in court papers. The nine justices appeared to be open to letting the lawsuit move up to the highest court in the US and it could bring huge changes to the App Store if Apple loses.

The iPhone users, including lead plaintiff Robert Pepper of Chicago, have argued that Apple's monopoly leads to inflated prices compared to if apps were available from other sources. "Consumers do not pay the 30 percent commission", the company's attorney, Daniel Wall, told the court.

Conservative Chief Justice John Roberts' questions suggested he agreed with Apple's position.

The app store is "really unique", said Mark Rifkin, one of the lawyers pressing the suit.

Justice Stephen Breyer, who taught antitrust law, said it was a simple and long-standing principle that those with a complaint sued the monopoly.

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The case hinges on how the justices will apply one of its past decisions to the claims against Apple. Under Frederick's theory, he said, consumers are hurt by higher prices and app developers are hurt by having to agree to Apple's 30 per cent commissions. Since iPhone owners can only buy apps through the App Store without jailbreaking their phones and voiding their warranties, they want to be compensated for the damages incurred. Such a move would certainly compromise the security of iPhones and iPads though.

Apple is supported by President Donald Trump's administration. Apple is also being backed by the U.S. Chamber of Commerce business group.

Liberal justices Sonia Sotomayor and Stephen Breyer seemed certain that the iPhone buyers' claims should go forward. "The App Store provides a safe, secure and trusted storefront for customers to find apps from across the globe that enrich and ease their lives". Both said they were skeptical of the 1970s-era rule that bars antitrust suits against manufacturers if consumers bought their products through middlemen, not directly from the maker.

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

Justice Brett Kavanaugh said if consumers are paying more than they should, then perhaps they should be able to sue. A judge initially threw out the suit, ruling that the consumers were not direct purchasers because the higher fees they paid were passed on to them by the developers. At issue now is only whether the antitrust suit against Apple can proceed to further hearings and a trial on whether Apple wields monopoly power. However, the 9U.S. Circuit Court of Appeals reversed the decision, stating that Apple was in fact selling apps directly to customers setting the stage for the Supreme Court showdown.

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