Apple seeks dismissal of iPhone App Store monopoly lawsuit

Posted:
in iPhone edited January 2014
Apple has asked for the dismissal of a 2011 suit that claims the company has a monopoly over applications available for download on the iPhone.

The two-year-old lawsuit accuses Apple of monopolistic practices by preventing developers from selling their software at a discounted price anywhere else. Apple takes a 30 percent cut of all content sold through the App Store, and its rules dictate that content providers cannot charge less for the same material sold elsewhere.

Stores


But Apple believes the suit should be tossed, according to Bloomberg, because the company doesn't set the price for paid application, and there are no antitrust laws against charging a price for distribution of a product.

Apple asked U.S. District Judge Yvonne Gonzalez Rogers to dismiss the suit in a hearing held in Oakland, Calif., this week. The same judge will also oversee a separate antitrust lawsuit that accuses Apple's iTunes of holding a monopoly position in the music downloading market.

The original app monopoly lawsuit was filed by seven consumers. An attorney representing the plaintiffs argued against the case being dismissed, noting that iPhone users cannot go anywhere but Apple's App Store to buy Angry Birds for their device.
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Comments

  • Reply 1 of 38
    crowleycrowley Posts: 5,639member
    Think someone needs to smack the plaintiffs round the head with a "it's not a crime to hold a monopoly, it's a crime to abuse a monopoly" mallet.

    No DRM on music and the web as an open environment for app developers, as well as "iPhone apps" and "music downloads" not being industries in themselves means this is a pile of non-issue.
  • Reply 2 of 38
    pedromartinspedromartins Posts: 1,333member


    And buying the iPhone is an option to everyone, unlike the times when we were forced to use crappy windows machines.


     


    Apple can do what they want. Don't you like it? Don't buy it.


     


    Microsoft also has the right to do the same thing with windows 8, as they should. We have choice now.

  • Reply 3 of 38
    rob53rob53 Posts: 1,974member
    Same, please edit your tag line. Did you mean to say "Apple asks for" instead of "Apple has for"? I usually don't comment on typos but please proofread your articles, especially the short ones.

    As for those consumers who want to go to a different store for iPhone apps all I can ask is why? The App Store is web based as would any other potential competitor. Do they expect to get those $0.99 apps for $0.98?
  • Reply 4 of 38
    zoetmbzoetmb Posts: 2,387member
    This is not about consumers. This is about lawyers trying to make big bucks on class action lawsuits. Ever get a legal notice about those based upon stocks that you've owned? The shareholders get a few pennies per share and the law firm gets $200 million. In most cases, it's not even worth my time to fill out the forms.

    Having said that, I think there is a slight chance a court could rule that Apple's insistence on exclusivity is abusive. Think about it: in the iTunes store, you can sell an MP3 track via Apple and also sell it elsewhere. Apple only gets their 30% on what you sell in their store. Why should the app store work any differently?

    On the other hand, if Apple did permit apps to be sold elsewhere, someone could open a copycat app store and charge developers 20% instead of 30% and that could be considered unfair (although not illegal). Perhaps there's a middle ground where developers can sell their apps on their own websites, but not via other distributors. I think this would be especially helpful to those developers whose apps don't "float to the top" of Apple's site. With 300,000 apps on Apple's site, most apps have virtually no visibility. And I bet the top 100 apps generate 90% of Apple's revenue anyway.
  • Reply 5 of 38
    starbird73starbird73 Posts: 538member
    I have recently begun to refuse to to participate in class action suits. It does me no good and only serves to cause prices to increase, IMHO, as lawyers get huge pay days and nothing changes.
  • Reply 6 of 38
    gcguygcguy Posts: 14member
    Kill the lawyers first.
  • Reply 7 of 38
    charlitunacharlituna Posts: 7,198member
    There have been suits before about Apple's vertical integration and Apple always wins them. VI is not illegal and not antitrust. Nor is being popular, like iTunes is, anti-trust.

    The only thing that Apple might get dinged on is if they have a favored nation clause that constricts the pricing for other ports of an item. So say you see Angry Birds for iOS for $4.99, the FNC demands that Angry Birds for Android can't be less than that. But that doesn't seem to be the argument in this case but rather that developers have to go through Apple if they want to be 'legit'
  • Reply 8 of 38
    charlitunacharlituna Posts: 7,198member

    Quote:

    Originally Posted by zoetmb View Post


    I think this would be especially helpful to those developers whose apps don't "float to the top" of Apple's site. With 300,000 apps on Apple's site, most apps have virtually no visibility. And I bet the top 100 apps generate 90% of Apple's revenue anyway.


     


    Many of those apps don't have any kind of advertising going on. You can't just make an app, dump it in the store and expect to make your fortune. 

  • Reply 9 of 38
    kdarlingkdarling Posts: 1,640member


    The ironic thing is that before the Apple App Store, Jobs used to poke fun at carriers and their app "walled gardens"... and yet all he did was turn around and create his own, even higher walled garden.


     


    (It's higher, because carriers allowed smartphones to download apps and media from any store, not just theirs.)


     


    Quote:

    Originally Posted by charlituna View Post


    Many of those apps don't have any kind of advertising going on. You can't just make an app, dump it in the store and expect to make your fortune. 



     


    It used to be that the app seller did that for you in return for their percentage.  When I started selling software in the 1980s, distributors paid for magazine ads, and they would also go to computer shows and demonstrate and sell your app. 


     


    Granted, they took a higher percentage, but you consistently made money, because your products stayed in the public view.


     


    Of course, it was also a different market, without hundreds of thousands of competitors.


     


    The upshot is, yes, you're so right.  Advertising is key.

  • Reply 10 of 38
    xsuxsu Posts: 401member
    So Apple is getting sued for insisting products sold in their App store has the lowest price. I'm kind of slow to understand how is that hurting consumers.
  • Reply 11 of 38
    pedromartinspedromartins Posts: 1,333member

    Quote:

    Originally Posted by KDarling View Post


    The ironic thing is that before the Apple App Store, Jobs used to poke fun at carriers and their app "walled gardens"... and yet all he did was turn around and create his own, even higher walled garden.


     


    (It's higher, because carriers allowed smartphones to download apps and media from any store, not just theirs.)


     


     


    It used to be that the app seller did that for you in return for their percentage.  When I started selling software in the 1980s, distributors paid for magazine ads, and they would also go to computer shows and demonstrate and sell your app. 


     


    Granted, they took a higher percentage, but you consistently made money, because your products stayed in the public view.


     


    Of course, it was also a different market, without hundreds of thousands of competitors.


     


    The upshot is, yes, you're so right.  Advertising is key.



    You are so obtuse...


     


    Do you really think that the App Store is like anything created before? That's more than obtuse. Android chill. Same sh*t on Mac Rumours.

  • Reply 12 of 38
    I think the tricky subject is 'price elsewhere'.

    Selling wares on iTunes restricts price competition elsewhere and is thus on the whole, bad for the consumer, and to me, of doubtful legality.
  • Reply 13 of 38
    so, because apple says you can only download from their App Store, it's a monopoly?

    then go to an android and download viruses.

    these people just don't understand.
  • Reply 14 of 38
    ktappektappe Posts: 759member
    Quote:
    Originally Posted by ClaudiusMaximus View Post

    so, because apple says you can only download from their App Store, it's a monopoly?



    then go to an android and download viruses.



    these people just don't understand.

     

    Actually you don't understand. Yes, it very much is a monopoly if Apple only allows you to download from their store. We can debate back & forth whether that is a good or bad thing, and whether Apple is abusing their monopoly, but it is the textbook definition of "monopoly" if there is only one seller of a product or service. No matter how much of an Apple fanboi you are or how indifferent to the dangers of a monopoly you are, it's simple fact.

    Whether Android has virii is absolutely, completely irrelevant.
  • Reply 15 of 38
    ktappektappe Posts: 759member
    One way Apple could argue against their monopoly status is to point out how jailbreakers of the iPhone can install their own apps. That is, until opposing counsel points out that Apple actively works to stop jailbreaking. Oops. Perhaps Apple should stop fighting the jailbreak community to keep its ass out of the fire? #pipedream
  • Reply 16 of 38
    tallest skiltallest skil Posts: 43,399member


    Originally Posted by ktappe View Post

    That is, until opposing counsel points out that Apple actively works to stop jailbreaking. Oops. Perhaps Apple should stop fighting the jailbreak community to keep its ass out of the fire?


     


    Uh, "oops" nothing. Apple is doing zero wrong and has zero responsibility to allow an easy time of that.

  • Reply 17 of 38
    dasanman69dasanman69 Posts: 12,972member
    charlituna wrote: »
    There have been suits before about Apple's vertical integration and Apple always wins them. VI is not illegal and not antitrust. Nor is being popular, like iTunes is, anti-trust.

    The only thing that Apple might get dinged on is if they have a favored nation clause that constricts the pricing for other ports of an item. So say you see Angry Birds for iOS for $4.99, the FNC demands that Angry Birds for Android can't be less than that. But that doesn't seem to be the argument in this case but rather that developers have to go through Apple if they want to be 'legit'

    Can Apple lower the price? In turn would Rovio then have to lower the price on other platforms?
  • Reply 18 of 38
    kdarlingkdarling Posts: 1,640member

    Quote:

    Originally Posted by pedromartins View Post


    Do you really think that the App Store is like anything created before? 



     


    Of course it is. 


     



    • Users are only allowed to download apps from a certain store.


    • The store is accessible and paid for from the phone.


    • The user does not have to enter account data each time.  


    • You pay to be a developer.  


    • Your app is vetted before being allowed in.


    • You get a percentage.


     


    That's exactly the model used by the feature phone carrier app stores that long predated Apple's store.  


     


    Didn't you ever download an app or ringtone with an old flip phone?

  • Reply 19 of 38
    froodfrood Posts: 771member


    I think this one should be dismissed.  If not, it will go Apple's way anyway.  If Apple lost this the precedent would have too many repercussions.  It would be like saying Ron Jons surf shop has a monopoly on Ron Jons T-shirts because you can only buy them at an actual Ron Jons store.  Trader Joe's has a monopoly on Trader Joe's items because they don't sell them anywhere else. etc etc.  People have a wide choice of T-shirts or supermarket items at other stores so their tight control of their products doesn't represent a monopoly.  


     


    If Apple owned 80% or 90% of the smartphone market you'd have a strong case alot like they one they pushed against IBM with their Big Brother ad because IBM was evil and controlled both the hardware *AND* software and wouldn't let anyone else into their ecosystem (remember those days?).  But Apple doesn't have 80/90% share.  People have choice.


     


    The choice ultimately lies with the consumer.  If you're okay with being forced to shop at only one store that has high prices, go there.  If you're not, shop somewhere where you do have choices (for better or worse).


     


    Most Apple users pride themselves on the fact that even though they are less than 25% of the smartphone market, they pay Apple 70% of the industry profits.  Let them. The people who prefer not to be involved in that system do have other options and the market is speaking for itself- working as intended without court intervention needed.

  • Reply 20 of 38

    Quote:

    Originally Posted by charlituna View Post



    There have been suits before about Apple's vertical integration and Apple always wins them. VI is not illegal and not antitrust. Nor is being popular, like iTunes is, anti-trust.



    The only thing that Apple might get dinged on is if they have a favored nation clause that constricts the pricing for other ports of an item. So say you see Angry Birds for iOS for $4.99, the FNC demands that Angry Birds for Android can't be less than that. But that doesn't seem to be the argument in this case but rather that developers have to go through Apple if they want to be 'legit'


     


     


    The FNC never applied to Apps, music, movies etc..... Only iBooks and it is no longer being enforced. 

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