USA court allows lawsuit on Apple’s App Store monopoly

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However, plaintiffs claim that they had paid using Apple's system when they bought apps from the App Store, therefore they are classified as direct victims of Apple's extremely high levies.

"Apple's effort to transform Illinois Brick from a direct-purchaser rule to a "who sets the price" rule would draw an arbitrary and unprincipled line among retailers based on retailers' financial arrangements with their manufacturers or suppliers", he wrote.

In so doing, the justices disagreed with Apple's defense, which sought to portray the company as a mere intermediary between consumers and app developers.

A dissenting opinion written by Justice Neil Gorsuch and joined by other conservatives on the court agreed with Apple's argument that developers, not the company, sell to consumers and that the lawsuit is based on "pass-on" liability.

Apple's App Store is the only place where iPhone users can legally buy apps.

"A claim that a monopolistic retailer (here, Apple) has used its monopoly to overcharge consumers is a classic antitrust claim". Perhaps, Apple could go the Google way and enable app sideloading as Google does on Android. Instead, Apple is simply a third party that sits between the users and the app makers.

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Apple explained in the same statement that developers are the one that set the price for their apps or memberships and that they have no say in that particular decision.

Essentially, the Apple v Pepper case argues that Apple's 30% commission cut from developers in the App Store is unfair, and results in inflated prices for iOS users.

But Kavanaugh stressed in his opinion that Apple's commissions also may affect consumers, as well as app developers.

The latest decision by the Supreme Court does appear to be merely a procedural win, but the fact that the case will move forward could eventually have significant implications for the App Store. "The vast majority of apps on the App Store are free and Apple gets nothing from them".

This issue originally started in 2011 when some iPhone users claimed that App Store prices would be lower in an open market. "And it raises questions about how the company has wielded that power, amid a wave of anti-tech sentiment that has also prompted concerns about the dominance of other tech behemoths such as Facebook and Amazon", The New York Times reported on Monday. The suit is supported by 30 state attorneys general, including from Texas, California and NY.

But even a reduction in the commission rate could deliver a financial blow that would even damage a company as profitable as Apple. But Apple asserts that the consumer plaintiffs in this case may not sue Apple because they supposedly were not "direct purchasers" from Apple under our decision in Illinois Brick Co. v. Illinois, 431 U.

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