iPhone Users Can Sue Apple Over App Store Prices, Justices Rule

May 13, 2019 by Dan McCue

The U.S. Supreme Court on Monday held that iPhone users can proceed with a class-action against Apple over what the plaintiff’s claim is the company’s monopoly over app sales.

While the decision is potentially a landmark ruling for consumers seeking to bring anti-trust cases against corporations, it is also noteworthy because it saw new Justice Brett Kavanaugh joining the court’s four liberal members in rejecting Apple’s plea for a dismissal.

Explaining the ruling from the bench, Kavanaugh said, “Leaving consumers at the mercy of monopolistic retailers simply because upstream suppliers could also sue the retailers would directly contradict the longstanding goal of effective private enforcement in antitrust cases.”

Justice Neil Gorsuch wrote a dissenting opinion, in which he was joined by Chief Justice John Roberts, and Justices Clarence Thomas and Samuel Alito.

Presently, iPhone users must purchase software for their smartphones exclusively through Apple’s App Store, something the class claims causes them to pay inflated app prices.

The Cupertino, California-based tech giant, backed by the Trump administration, disputed the legality of the suit, arguing it was only acting as an agent for app developers, who set their own prices and pay Apple’s commission.

Apple had argued that a Supreme Court ruling allowing the case to proceed could pose a threat to e-commerce, a rapidly expanding segment of the U.S. economy worth hundreds of billions of dollars in annual sales.

The justices did not address the merits of the plaintiffs’ case against Apple, but the ruling allows the case to advance through district court.

The plaintiffs, including lead plaintiff Robert Pepper of Chicago, filed the suit in a California federal court in 2011, claiming Apple’s monopoly leads to inflated prices compared to if apps were available from other sources.

They were supported by 30 state attorneys general, including from Texas, California and New York.

After a federal judge in Oakland, California tossed the suit, Ninth Circuit Court of Appeals revived it in 2017, finding that Apple was a distributor that sold iPhone apps directly to consumers.

A representative of Apple could not immediately be reached for comment.

The case is Apple, Inc. v. Pepper, No. 17-204.

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