Apple just suffered a significant setback after the Supreme Court ruled that consumers do have standing to sue Apple on anti-trust complaints.
The case, Apple v. Pepper, alleges that Apple is raising prices for consumers with its mandatory 30% cut of any app sales consumers make. Apple has claimed that consumers are actually purchasing the apps from the developer directly and that Apple’s relationship was with the developers, who then paid them the commission.
In a 5 to 4 ruling the Supreme Court came down on the side of the complainants, at least in regard to the relationship, saying “We disagree. The plaintiffs purchased apps directly from Apple and therefore are direct purchasers.”
“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,” Justice Brett Kavanaugh wrote.
The court has not declared Apple monopolists yet, but this ruling does allow the case to proceed.
Apple has argued that they are not a monopoly as consumers could always purchase apps from other app stores by buying another device, a somewhat ridiculous position. If Apple is found to be a monopolist they may have to refund billions to consumers or may even be forced to open up the iPhone to alternate app stores.
Windows and Android would of course not be affected as they are open platforms.
Update: Apple has released a statement which says:
Today’s decision means plaintiffs can proceed with their case in District court. We’re confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric.
We’re proud to have created the safest, most secure and trusted platform for customers and a great business opportunity for all developers around the world. Developers set the price they want to charge for their app and Apple has no role in that. The vast majority of apps on the App Store are free and Apple gets nothing from them. The only instance where Apple shares in revenue is if the developer chooses to sell digital services through the App Store.
Developers have a number of platforms to choose from to deliver their software — from other apps stores, to Smart TVs to gaming consoles – and we work hard every day to make our store is the best, safest and most competitive in the world.
It is notable while the statement says a lot about the choices available to developers, it does not say much at all about the choices available to iPhone owners for getting apps outside the App Store.
Do our readers agree that any fair court would find Apple guilty? Let us know below.
Via The Verge