Supreme Court will hear Apple's appeal about iPhone App Store antitrust suit

Posted:
in iPhone edited June 2018
The Supreme Court has decided that it will hear Apple's appeal regarding a contentious judgement allowing a seven-year-old antitrust case about the iOS App Store to continue.




In the suit, originally filed in late 2011, a group of consumers accused Apple of monopolizing the market for iPhone apps by not allowing any other way of purchasing such apps, and therefore engaging in anti-competitive practices. The suit alleges that since the App Store's launch, Apple "illegally monopolized the distribution of iPhone apps, and that the commissions charged to app developers inflate the prices consumers ultimately pay for apps."

According to attorneys attached to the matter, the suit could result in Apple being forced to pay out hundreds of millions of dollars to consumers, should Apple be found guilty of antitrust behavior in what it charges developers.

The US Supreme Court will hear arguments on the matter at some point in October.

BREAKING: Supreme Court will consider Apple's bid to end an antitrust suit over the market for iPhone apps. Suit accuses Apple of monopolizing app market so it can charge excessive commissions.

-- Greg Stohr (@GregStohr)


The original suit also accused Apple and AT&T of conspiring to monopolize the "voice and data services" market for iPhones, although this argument was later dropped from the case.

In January of 2017, the Ninth Circuit reversed a lower court's ruling which found that the plaintiffs lacked standing to sue, because they had purchased the apps directly from Apple, and not from third party app developers. The court did not award a specific damage award to the plaintiffs.

Throughout the case Apple sought repeatedly, and unsuccessfully, to dismiss the suit.

The Department of Justice has sided with Apple in the matter. In a filing in May, the DOJ argued that the appeals court misapplied previous case law on the matter, and the refusal of Apple's appeal should either be returned for reconsideration, or tossed entirely.
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Comments

  • Reply 1 of 41
    You know what actually inflates the prices that consumers pay? Stupid lawsuits like this.
    lkruppDAalsethviclauyycrob53libertyandfreejbdragonchiawatto_cobrajony0
  • Reply 2 of 41
    lkrupplkrupp Posts: 6,682member
    I often scratch my head when commenters try to call Apple a monopoly and anti-competitive inside their own ecosystem. Apple is a company who, while it is the largest company in the world by market capitalization, has a minority market share in just about every market in which it participates. So you can’t install any apps outside the App Store? How is Apple being anti-competitive when you can literally walk across the street and get an Android phone for FREE from any of a dozen cellphone stores and load anything you want to on your new phone? The “It’s my device and I can do anything I want with it” crowd always tries to peddle its twaddle about Apple being a monopoly that should be broken up. Gimme a break. I’m hoping the SCOTUS shuts this down but who knows.
    h2pjohnfrombeyondronnmacxpressfotoformatbadmonkrob53jbdragonchiawatto_cobra
  • Reply 3 of 41
    YupaYupa Posts: 6unconfirmed, member
    I don't think it's stupid.

    to open ios to others stores (to the user's discretion) would be good for consumers.

    essentially, like the Mac.
  • Reply 4 of 41
    zoetmbzoetmb Posts: 2,395member
    Absolutely unbelievable.   No one would have predicted 20 years ago that one could buy tens of thousands of software apps for under $10 each.   I don't know what the average is, but once you get away from the large companies like Microsoft, Adobe, etc., I'd bet most apps hover around $3 to $5.   The App Store hasn't increased the price of applications.  It's lowered them and quite substantially in spite of Apple taking a 30% cut.  Back in the physical media days, shipping alone used to cost more than most apps do today.   

    The people who filed this suit have no real understanding of business.   In the hardware world, whereas back in the 1970's, wholesale prices were generally around 50% of list price, today hardware wholesale prices are more like 90% of list price.  Manufacturers have left less and less for retailers.    Sell software through a physical distribution channel (like Ingram Micro-D) and you'll wind up with about 45% of retail in most cases.    The developers should be thrilled with 70%.

    Apple's 30% commission is quite fair.   Without the AppStore, I'd say at least 90% of the developers wouldn't have a market and wouldn't exist.   If Apple did give up exclusivity, do they really think they'd do any better on Amazon?   Amazon would take a bigger cut AND their titles would be buried and few would ever see them.  

    There are plenty of companies that only sell their products through their own channels and it's not considered anti-competitive.   Anyone is free to buy an Android phone and use those apps instead.    
    viclauyycrob53lamboaudi4chiawatto_cobrajony0
  • Reply 5 of 41
    nunzynunzy Posts: 662member
    lkrupp said:
    The “It’s my device and I can do anything I want with it” crowd always tries to peddle its twaddle ...
    It certainly IS twaddle. It's NOT their device. They are NOT allowed to do anything with it.
  • Reply 6 of 41
    lkrupplkrupp Posts: 6,682member
    I predict the armchair lawyers will soon be out in force here with their sage pronouncements of what a monopoly is. Bottom line for them? If they don’t like something Apple does it’s a monopoly. I love watching those YouTube videos with Sovereign Citizens representing themselves in front of a judge trying to argue that they are “traveling” and not “driving” and are not subject to state’s laws under the Articles of Confederation. Very entertaining, especially when the judge rejects the nonsense.
    watto_cobra
  • Reply 7 of 41
    tallest skiltallest skil Posts: 43,399member
    Yupa said:
    to open ios to others stores (to the user's discretion) would be good for consumers.
    Enjoy your malware. Explain the legal obligation Apple has to give you other stores, considering its status in the market.
    macseekerviclauyycrob53lamboaudi4jbdragonchiawatto_cobraicoco3
  • Reply 8 of 41
    Cesar Battistini MazieroCesar Battistini Maziero Posts: 150unconfirmed, member
    It's their product!

    It's ridiculous obligating a company to install software from other companies on their product.

    The costumer would only suffer and iOS would become the crap Android is today!
    rob53lamboaudi4jbdragonchiawatto_cobraicoco3jony0
  • Reply 9 of 41
    It is a silly argument for a noble concept: If you know the risks, you should be able to install any app you want on any computer hardware you own including your phone. That includes an app store from another company or software to scan for nearby WiFi or a crypto minor or custom watch faces or anything else your heart desires.
    edited June 2018
  • Reply 10 of 41
    pujones1pujones1 Posts: 147member
    Isn’t this how MS got sucker punched into letting Netscape onto Windows? Without Apple there would be no platform or iPhone hardware. It was developed by them with billions in research and development. If I don’t like the walled garden I can jump the fence and grab an Android phone from any number of manufacturers. The whole world can do the same. I don’t see how it’s a monopoly or hurts the consumer but then again I’m not a lawyer either. The App Store has made billions for developers who otherwise would not be as successful or would have even started at all. The majority of features are the same on all phones in some form. The hardware is the key now. Apple’s market share isn’t even as big as android. I just don’t get it. 
    watto_cobra
  • Reply 11 of 41
    mdriftmeyermdriftmeyer Posts: 7,211member
    Supreme Court should end this ignorance by third parties and make a final verdict in favor of Apple's store. One of the most obvious benefits of Apple's store is the financial management backend they do for you, global distribution you don't have to set up and extensive screening of your application before releasing to market.
    viclauyycrob53chiawatto_cobra
  • Reply 12 of 41
    macxpressmacxpress Posts: 4,756member
    Yupa said:
    I don't think it's stupid.

    to open ios to others stores (to the user's discretion) would be good for consumers.

    essentially, like the Mac.
    Choice is not always good for consumers. Just look at Android as a prime example!

    BTW...I can see the Mac going more and more toward iOS down the road as far as how apps are installed. It's kinda already starting with macOS Mojave. 

    Better fire up another lawsuit!
    edited June 2018 tallest skilstompylamboaudi4watto_cobra
  • Reply 13 of 41
    SpamSandwichSpamSandwich Posts: 30,690member
    Absolutely wins the most insane class-action suit award for this year.
    macxpressrob53lamboaudi4chiawatto_cobra
  • Reply 14 of 41
    avon b7avon b7 Posts: 3,309member
    lkrupp said:
    I often scratch my head when commenters try to call Apple a monopoly and anti-competitive inside their own ecosystem. Apple is a company who, while it is the largest company in the world by market capitalization, has a minority market share in just about every market in which it participates. So you can’t install any apps outside the App Store? How is Apple being anti-competitive when you can literally walk across the street and get an Android phone for FREE from any of a dozen cellphone stores and load anything you want to on your new phone? The “It’s my device and I can do anything I want with it” crowd always tries to peddle its twaddle about Apple being a monopoly that should be broken up. Gimme a break. I’m hoping the SCOTUS shuts this down but who knows.
    It isn't as simple as that. If you look at things from a vendor perspective, Apple is far from small fry and can effectively have monopolistic behaviour on key components and their availability. It is attempting to secure key components right now which could have a disastrous effect on smaller players.

    Apple as an OS platform is not a monopoly but the company can be monopolistic in creating the hardware platform that the OS runs on from a supply chain perspective.

    The root issue here, however, is if users should be allowed to opt out of the Apple App Store.

    These issues would appear to be independent of each other but when you reach a certain size and someone lodges a complaint about your business practices, everything can get sucked into one giant ruling.
    [Deleted User]
  • Reply 15 of 41
    tallest skiltallest skil Posts: 43,399member
    avon b7 said:
    The root issue here, however, is if users should be allowed to opt out of the Apple App Store.
    They’re already allowed to opt out. Don’t download apps if you don’t like the App Store. There is absolutely no law that exists–or can ever exist–which says that Apple must be forced to allow third party content of ANY sort on their devices.
    SpamSandwichwatto_cobra
  • Reply 16 of 41
    avon b7avon b7 Posts: 3,309member
    avon b7 said:
    The root issue here, however, is if users should be allowed to opt out of the Apple App Store.
    They’re already allowed to opt out. Don’t download apps if you don’t like the App Store. There is absolutely no law that exists–or can ever exist–which says that Apple must be forced to allow third party content of ANY sort on their devices.
    Never say never. It wasn't long ago that carriers were forced to share infrastructure.

    Orange is currently installing Fibre in my street but will have to open it up to its competitors. State bodies along with the carriers themselves negotiate the terms but they have no option but to accept the situation.
  • Reply 17 of 41
    gatorguygatorguy Posts: 19,985member
    lkrupp said:
    I predict the armchair lawyers will soon be out in force here with their sage pronouncements of what a monopoly is. Bottom line for them? If they don’t like something Apple does it’s a monopoly. I love watching those YouTube videos with Sovereign Citizens representing themselves in front of a judge trying to argue that they are “traveling” and not “driving” and are not subject to state’s laws under the Articles of Confederation. Very entertaining, especially when the judge rejects the nonsense.
    Anticompetitive and monopoly are different issues, something to always keep in mind. A company does not need to have a monopoly in a market to run afoul of competition laws.

    But anyway, in this specific instance the lawsuit isn't claiming Apple is a monopoly but instead that Apple monopolizes the availability of iOS apps, and therefore is acting in an anti-competitive manner. They may have a perfect right to as well, but now SCOTUS will be weighing in.
    muthuk_vanalingam[Deleted User]
  • Reply 18 of 41
    croprcropr Posts: 898member
    From a consumer point of view there is no anti-competitive behaviour: you cannot buy a Mercedes at a BMW dealer.  

    For an app developer this is a slightly different story.   You can only sell your iOS app via the App Store, at the business conditions imposed by Apple.   This might be considered as anti-competitive behaviour.   But of course this is not at stake at the Supreme Court
    edited June 2018 muthuk_vanalingam
  • Reply 19 of 41
    gatorguygatorguy Posts: 19,985member
    cropr said:
    From a consumer point of view there is no anti-competitive behaviour: you cannot buy a Mercedes at a BMW dealer.  

    For an app developer this is a slightly different story.   You can only sell your iOS app via the App Store, at the business conditions imposed by Apple.   This might be considered as anti-competitive behaviour.   But of course this is not at stake at the Supreme Court
    But the consumer might be able to buy certain PARTS to fit his Mercedes from the BMW dealer. The Mercedes dealer cannot prevent parts from being used on the owner's vehicle that didn't come directly from Mercedes...
    Magnuson Moss.

    That would be the more proper comparison IMHO. No one is arguing that you should be able to buy the entire iPhone from anyone but Apple.  
    edited June 2018 muthuk_vanalingam
  • Reply 20 of 41
    mcdavemcdave Posts: 1,090member
    I think Apple should design iOS and nobody else.

    Actually, the key reason for upholding Apple’s model is, choice.  If Apple are forced to open iOS to other App stores they follow the fragmented model of the other platforms leaving us no integrated option for a mainstream mobile platform.  Apple’s closed system currently gives us that option.
    edited June 2018 watto_cobraicoco3
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