Case against Apple over app commission likely to proceed

Case against Apple over app commission likely to proceed

"Consumers are harmed too", added Justice Brett M. Kavanaugh, since they allegedly pay higher prices because Apple takes a 30 percent commission on the sale of apps.

An Apple spokesperson said in a statement to Fortune that the App Store "has fueled competition and growth in app development", which created millions of jobs and resulted in over $100 billion in payments to developments worldwide. He said he's concerned that if the ruling went against Apple, the company would be liable by both consumers and app developers for a single price increase.

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. "Indirect purchasers may be better suited to enforce the antitrust laws", Gorsuch said.

They say that by charging 30 per cent commission for apps sold through their store, Apple was effectively engaging in price gouging that was passed on to customers.

But the lawsuit says the Cupertino, California-based company exerts a lot of control over the process, including a requirement that prices end in.99.

Part of the concern, the court said in that case, was to free judges from having to make complex calculations of damages.

Apple has said it is acting only as the agent for app developers who sell the apps to consumers through the App Store.

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But it was not just the court's liberals who seemed skeptical of Apple's argument.

The case has bounced around the lower courts for several years.

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 states are led by Texas Attorney General Ken Paxton, a Republican, and Iowa Attorney General Tom Miller, a Democrat. CNBC today described this legal action as the most important business dispute of the Supreme Court's current term and also "the most consequential litigation facing Apple outside of its billion dollar intellectual property suit against chipmaker Qualcomm". Under federal law, proving such an allegation could be worth millions of dollars, because awards are tripled for antitrust violations.

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.

But the 9th Circuit Court of Appeals allowed the antitrust suit to proceed on the theory that Apple acts as a distributor with monopoly power over certain products - in this instance, apps on the iPhone.

So as Apple sees it, even if the App Store amounted to an illegal monopoly - and the company insists it isn't - only the app developers could sue, because they're the actual buyers of Apple's distribution service.

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