Supreme Court asks Trump administration for thoughts on App Store pricing lawsuit
The U.S. Supreme Court is asking the Trump administration for opinions on whether it should hear Apple's attempt to dismiss a years-long class-action lawsuit, which claims the company has inflated App Store prices by charging developers a 30 percent commission and blocking sales elsewhere.
The company is hoping to overturn a 9th Circuit Court of Appeals ruling that allowed the suit to proceed and rejected Apple's position that only developers -- not consumers -- have the legal standing to file such an action, Reuters said. The Supreme Court's advice will come by way of the Justice Department.
The case dates back to 2011, and was launched in California by several iPhone buyers who said Apple is monopolizing the sales of apps. Whereas people using macOS, Windows, or Android can get apps outside of official stores, Apple has completely blocked third-party options on iOS, which might otherwise spur price competition.
The 9th Circuit sided with the plaintiffs' argument that while developers are being charged the commission, it's the public that's paying for any inflated prices.
A number of developers have admitted to charging higher prices to compensate for Apple's commission. One of the better-known examples is Spotify, which until recently was charging more for in-app subscriptions than those bought elsewhere. The music service ultimately decided to scrap in-app purchases entirely rather than maintain the discrepancy.
The company is hoping to overturn a 9th Circuit Court of Appeals ruling that allowed the suit to proceed and rejected Apple's position that only developers -- not consumers -- have the legal standing to file such an action, Reuters said. The Supreme Court's advice will come by way of the Justice Department.
The case dates back to 2011, and was launched in California by several iPhone buyers who said Apple is monopolizing the sales of apps. Whereas people using macOS, Windows, or Android can get apps outside of official stores, Apple has completely blocked third-party options on iOS, which might otherwise spur price competition.
The 9th Circuit sided with the plaintiffs' argument that while developers are being charged the commission, it's the public that's paying for any inflated prices.
A number of developers have admitted to charging higher prices to compensate for Apple's commission. One of the better-known examples is Spotify, which until recently was charging more for in-app subscriptions than those bought elsewhere. The music service ultimately decided to scrap in-app purchases entirely rather than maintain the discrepancy.
Comments
Viewed from this side of the pond it looks a little odd.
apple is eating an income. Back in the day when you purchased software from Best Buy- did Best Buy make money? How about a restaurant selling Bacardi or a Chevy selling to a dealership, does the dealership make money? Amazon sells software, they earn an income too.
Groceries go through so many channels - the farmer always complains that they receive nothing compared to how much the retailer is selling product.
Companies have 3 prices: retail, wholesale, and what they need to make. Or how about this, what they need to make and retail price.
This is all BS!
By far Apple apps are the lowest prices of anything out there.
#AppleOutsider
As for how this will play out , it will be tough to say. The net result here is there any justification in the law to force a store to sell a certain product. I dont see it myself and frankly the retail industry would raise hell if somebody tried to implement such.
It will be interesting to see how this plays out.
This seems a bit strange to me too, but I'm guessing there's some sort of precedent. I'm not an expert on this matter, but I doubt this is the first time something like this has happened. No need to go off the rails.
The Justice Department has broad discretion under Federal antitrust law. Makes perfect sense for the SCOTUS to seek the opinion of the executive branch before hearing this case. There's nothing controversial about this move.
The case itself could turn out to be very controversial with serious implications, but this request by the Court is SOP.
It's the end-user raising a stink, not the developers. I guess some whiny, uneducated users believe that Apple should allow 3rd-party "app stores" to sell that same app at a 30% discount.
I for one an happy that Apple only holds the keys to the iOS gate. While other app stores like GooglePlay are trying to get a better handle of rogue apps, just look at any other store out there and it is just an infectious cesspool of malicious apps, typical of an Android system.
That 30% fee gives developers almost unlimited access to hundreds of millions of iPhone users that know Apple's App Store is a safe place to go for Apps. Developers don't have to deal with the headaches of dealing with credit cards, merchants, marketing, etc... post your App, get it approved, and if it's good... just waiting for the checks to come from Apple. A huge amount of headaches for the developer is erased. They better be grateful. That 30% cut is cheap compared to the amount of work involved in attempting to do it themselves.
But no... users are stupid and unfortunately, there are lawyers willing to file in the hopes of stealing part of Apple's pie.
You may have that backwards. It's not about forcing a store to sell a product, it's whether (and to what extent) a firm can force consumers to use a particular store for a given product. Ultimately it will come down to how the courts define the relevant market. If it's "software for iOS devices" then obviously Apple has a monopoly; if it's "software for mobile devices" (or even "software for computing devices") Apple either has significant (or very little) market power but less than a monopoly. Hopefully, the Courts will determine that the vast majority of software available in the App Store is also available via other stores (for other devices) for very similar prices, and therefore there's not a big anti-trust issue here.
Nobody forced these customers to buy iPhones instead of Android.
However, you license the OS, which remains the property of Apple, and Apple has a right to control what happens with its property, much the way a movie theater has the right to prohibit patrons bringing in their own food. If a movie theater wants to sell popcorn at a 1000% markup, then you have the choice of watching the movie without popcorn, or going somewhere else to watch the movie. If Apple, which spent untold billions of dollars building, testing, marketing and supporting iOS wants to create a store within that property where they are the only seller of goods that can be consumed within that property, then I don’t see this as different from a movie theater deciding who can sell snacks to its patrons and collecting a percentage of the take.
What is equally absurd is that this lawsuit complains that Apple is making 30%, when they are providing the warehouse, the transportation system, the store front, the advertising venue, the banking services, the security, and most importantly, their hundreds of millions of customers for that small fee when other traditional retailers typically mark prices up 100%. Fk these ambulance chasers!
My mistake. I read it as SCOTUS asking the Presidential Office rather than the Solicitor General. Asking the Solicitor General would make sense, however I would have thought that Supreme Court would make its own decisions rather than ask the chief law officer.
People have become blind of the dangers of monopolies in this hyper capitalist society. How many of you forgot that Microsoft was found guilty or running a monopoly 20 years ago. If our government (at that time) had not stepped in it is unlikely Apple would exist today.