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Apple in Supreme Court to block customers from suing for monopoly abuse

29 November, 2018, 07:21 | Author: Arnold Gilbert
  • The U.S. Supreme Court in session for 229 years will be where this issue’s fate is decided

The Supreme Court will hear the case on Monday after it was revived by the ninth circuit court previous year.

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. Apple says that the app developers are the ones who set the price of their apps; the plaintiffs counter that Apple is to blame because the company takes a 30% cut of an app's revenue.

The case hinges on how the justices will apply one of its past decisions to the claims against Apple.

The lawyers behind the suit maintain that customers have a direct relationship with Apple (and thus an antitrust case) since they send money to that company, not the individual app developers. Justice Stephen Breyer, who used to teach antitrust law at Harvard Law School, said the consumers' case seemed straightforward and in line with a century of antitrust law. 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.

"The Ninth Circuit is home to a disproportionate share of the nation's e-commerce companies, and its erroneous decision creates uncertainty and a lack of uniformity about the proper application of Section 4 (awarding treble damages based on the antitrust law) to this increasingly common business model", it said.

Software developers say that outcome would disrupt similar online marketplaces that operate between app creators and customers. Well, the App Store would lose all its power in the first place.

Several justices appeared skeptical of Apple's argument. At that time, Judge Yvonne Rogers ruled in favor (PDF) of Apple, reasoning that end users of the applications were indirect customers are therefore could not be the ones to sue under United States antitrust law.

"The harm to the consumers here is that they have to pay higher prices for apps", Francisco said, because "Apple controls the pipeline that connects app makers on the one hand and iPhone users on the other".

Apple says it doesn't own the apps or sell them. An Oakland, California judge tossed the case based on this 1977 Supreme Court ruling. "From my perspective, I've just engaged in a one-step transaction with Apple".

Apple has the support of the Justice Department, which argues that Apple is simply providing a marketplace for app consumers. The San Francisco-based 9th US Circuit Court of Appeals past year revived the lawsuit, deciding that Apple was a distributor that sold iPhone apps directly to consumers.

He is representing a group of consumers, led by Chicagoan Robert Pepper, that wants to show app prices would be lower if not for Apple's actions.

A trial court initially dismissed the lawsuit, but the 9th U.S. Circuit Court of Appeals revived it.

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