US Supreme Court greenlights lawsuit over App Store monopoly

Posted:
in iPhone edited May 13
The U.S. Supreme Court on Monday voted 5 to 4 to allow an antitrust lawsuit against Apple to proceed, one accusing the company of maintaining a monopoly on iOS apps via the App Store.

iOS 12 App Store


The ruling, with an opinion authored by Justice Brett Kavanaugh, relates to a 2011 case arguing that with the App Store being the only sanctioned place for iOS downloads, that's led to artificially inflated prices. The company claims a 30 percent cut from most transactions, shrinking to 15 percent only for subscriptions active for over a year.

The case, Apple v. Pepper, was actually dismissed in 2013 by a California court, but the Court of Appeals for the Ninth Circuit allowed it to return in 2017. Apple's pushback brought the matter to the Supreme Court, though only to decide whether the case can continue, not its final outcome.

Apple has argued that developers are the ones who set prices, and that it's not in violation of any antitrust laws. It has moreover claimed that by paying its commission, developers are "buying a package of services which include distribution and software and intellectual property and testing."

The Justice Department filed an amicus in support of the company, but that wasn't enough to sway the court.

In an earlier hearing, Justices Stephen Breyer, Elena Kagan, and Sonia Sotomayor questioned Apple's reference to the Illinois Brick doctrine, relating to direct versus indirect purchasers. From their perspective people on the App Store are "engaged in a one-step transaction with Apple," said Kagan.

Pro-Apple Justices included Samuel Alito and Neil Gorsuch, both of whom hinted that Illinois Brick should be re-examined. Alito pointed out that "tens of thousands" of app developers have yet to launch antitrust actions.

Apple has frequently faced criticism for its tight control of iOS apps, however. That may be coming to a head not just through Apple v. Pepper, but a European Commission investigation sparked by Spotify. The Swedish streamer's main complaint is that Apple Music enjoys an unfair advantage since it's not only integrated across Apple devices, but exempt from any commission. Spotify did at one point offer in-app Premium subscriptions, but at a higher price than via the Web as a way of compensating for Apple's take. It ultimately dropped the in-app option.

Should Apple lose the case it might be forced not just to allow third-party app stores, but to pay up to triple in damages as a deterrent.

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Comments

  • Reply 1 of 86
    The problem is not with just Apple Store, but censorship. It is not Appe's business what applications should be allowed to run on device (except those that violate some local laws). We purchase that device to own it - not to lease it under strict contract. They can restrict apps on Apple Store, but then do not restrict people from haveing alternative stores. Disclaimers can be in place. I think this backfire of foolish concept of holding manufacturer liable for actions and abuse of others. So California uses that wicked logic and needs to continue along this narrative while it should verify it's foundations in the first place. Any tool in wrong hands could be misused, abused and used for illegal intent as well. No manufacturer should be liable in those cases.
    ElCapitandonjuanavon b7tyler82Carnagejbdragon
  • Reply 2 of 86
    22july201322july2013 Posts: 657member
    This should put the case to rest once a ruling comes down. Certainty is always good. However there are other jurisdictions besides the US where a different ruling may come down. One option Apple has, if they lose in any jurisdiction, is to remove the App Store (the original iPhone didn't have an app store). Another option is to stop selling the iPhone in that jurisdiction. And of course a third option is to allow, for example, a Google App Store on iOS in that jurisdiction. Surely no court can force Apple to sell an iPhone or to have an app store at all.
  • Reply 3 of 86
    n2itivguyn2itivguy Posts: 57member
    Clear waste of taxpayer dollars letting this proceed. There are alternatives to iPhones and the App Store. Ridiculous. 
    Andy.HardwakenetmageflyingdpMacPropalominedhawkins541uraharacornchipcintoslordjohnwhorfin
  • Reply 4 of 86
    22july201322july2013 Posts: 657member
    The problem is not with just Apple Store, but censorship. It is not Appe's business what applications should be allowed to run on device (except those that violate some local laws). We purchase that device to own it - not to lease it under strict contract. They can restrict apps on Apple Store, but then do not restrict people from haveing alternative stores. Disclaimers can be in place. I think this backfire of foolish concept of holding manufacturer liable for actions and abuse of others. So California uses that wicked logic and needs to continue along this narrative while it should verify it's foundations in the first place. Any tool in wrong hands could be misused, abused and used for illegal intent as well. No manufacturer should be liable in those cases.
    You say it's Apple responsibility to enforce local laws by determining which apps can be run on an iPhone? How exactly would Apple know what apps are on your iPhone if you bought the app through a store other than Apple? I can't understand how that would or could be done. Do you want Apple spying on everyone's iPhone watching what they have loaded through third party apps?
    rob53qwerty52AppleExposedhabi000
  • Reply 5 of 86
    sdw2001sdw2001 Posts: 17,035member
    n2itivguy said:
    Clear waste of taxpayer dollars letting this proceed. There are alternatives to iPhones and the App Store. Ridiculous. 

    I don't agree.  There are alternatives to the iPhone, but not the App store if you're an iPhone user.  I'm not saying I agree it's an illegal monopoly (I lean towards thinking its not), but there is at least an argument there.  It's not ridiculous at all, or SCOTUS wouldn't have allowed it.  It means there is at least some substantial chance the plaintiffs will prevail.  
    avon b7chemenginAppleExposedCarnage
  • Reply 6 of 86
    spice-boyspice-boy Posts: 813member
    The problem is not with just Apple Store, but censorship. It is not Appe's business what applications should be allowed to run on device (except those that violate some local laws). We purchase that device to own it - not to lease it under strict contract. They can restrict apps on Apple Store, but then do not restrict people from haveing alternative stores. Disclaimers can be in place. I think this backfire of foolish concept of holding manufacturer liable for actions and abuse of others. So California uses that wicked logic and needs to continue along this narrative while it should verify it's foundations in the first place. Any tool in wrong hands could be misused, abused and used for illegal intent as well. No manufacturer should be liable in those cases.
    don't worry if gun makers can make a product that has one function (to kill a living thing) and never get sued Apple will not have a problem.
    rob53
  • Reply 7 of 86
    ericthehalfbeeericthehalfbee Posts: 4,060member
    This lawsuit will fail.
    AppleExposedchasm
  • Reply 8 of 86
    netmagenetmage Posts: 267member
    sdw2001 said:
    n2itivguy said:
    Clear waste of taxpayer dollars letting this proceed. There are alternatives to iPhones and the App Store. Ridiculous. 

     It's not ridiculous at all, or SCOTUS wouldn't have allowed it.  It means there is at least some substantial chance the plaintiffs will prevail.  
    SCOTUS is hardly the wisest court in the land, simply the highest and a 5-4 indicates this wasn't clear cut in either direction. Also, the ruling is clear that they are saying nothing about the actual merits of the case, just that the dismissal wasn't upheld.
    MacProcornchipStrangeDays
  • Reply 9 of 86
    jbdragonjbdragon Posts: 2,110member
    This really seems like a dumb case. While I'm against Apple's Censorship. I think that's completely WRONG. On the other hand it's their App store. A store they created and opened up to allow 3rd party's into. Just like Nintendo, Microsoft and Sony have their own store on their console systems. It's no different.

    Do these developers remember the days of having to put your software on a disc and into a Box and sell it in the store? All that was a bigger cut than Apple's 30%. The same 30% that Google and Amazon charge in their own App stores.

    Apple only has about 20% of the Global Market anyway. They are far from some Monopoly.
    edited May 13 MacPropalomineuraharadhawkins541cintospscooter63
  • Reply 10 of 86
    SpamSandwichSpamSandwich Posts: 31,087member
    The problem is not with just Apple Store, but censorship. It is not Appe's business what applications should be allowed to run on device (except those that violate some local laws). We purchase that device to own it - not to lease it under strict contract. They can restrict apps on Apple Store, but then do not restrict people from haveing alternative stores. Disclaimers can be in place. I think this backfire of foolish concept of holding manufacturer liable for actions and abuse of others. So California uses that wicked logic and needs to continue along this narrative while it should verify it's foundations in the first place. Any tool in wrong hands could be misused, abused and used for illegal intent as well. No manufacturer should be liable in those cases.
    There is no “right” to the use of Apple’s developer tools to create apps, nor is there a “right” to access to an iPhone with a competing app store. You knew the deal when you purchased your phone.

    If I have satellite TV service, do I have a right to access all of the programming a competing cable company may have?

    If I fill my gas tank at a Shell gas station, do I have a right to demand they also carry a cheaper brand of gas?

    Maybe Apple just has a bunch of really dumb lawyers, but there’s no excuse this case should have gone forward.
    palominejdgazStrangeDayspscooter63rob53qwerty52jbdragonchasmjony0
  • Reply 11 of 86
    iOS_Guy80iOS_Guy80 Posts: 151member
    Where else would you want to download software from for your Apple device? Apple developed the App Store to provide a safe and secure platform to purchases software that is productive, entertaining and useful for a broad spectrum of users. The software is designed to be compatible with the hardware via standards set up by Apple. You want to participate in the store and sell software you have to pay and follow the guidelines. Simple. There are other App Store alternatives for developers to sell their software albeit not for Apple devices. 
  • Reply 12 of 86
    SpamSandwichSpamSandwich Posts: 31,087member
    sdw2001 said:
    n2itivguy said:
    Clear waste of taxpayer dollars letting this proceed. There are alternatives to iPhones and the App Store. Ridiculous. 

    I don't agree.  There are alternatives to the iPhone, but not the App store if you're an iPhone user.  I'm not saying I agree it's an illegal monopoly (I lean towards thinking its not), but there is at least an argument there.  It's not ridiculous at all, or SCOTUS wouldn't have allowed it.  It means there is at least some substantial chance the plaintiffs will prevail.  
    Ever heard of web apps?
    cornchip
  • Reply 13 of 86
    22july201322july2013 Posts: 657member
    (1) If the US Supreme Court rules that Apple must allow third party app stores, do you think Apple would enforce that policy worldwide, or would they change this only for the US? (2) If Apple wins, would other countries bring this same case to trial and get a different result? (3) The US Supreme Court has a tradition of returning results that are a compromise... can anyone think of a compromise in this case? For example could the ruling be that third party stores have the right to exist but still have to go through Apple's vetting and digital signing processes (for which Apple could charge a small fee)? That seems like a fair compromise to me.
  • Reply 14 of 86
    LenardHLenardH Posts: 12member
    For safety reasons I would not put an app on my iPhone unless its from the App Store.Think about RANSOM ware.....
    iOS_Guy80
  • Reply 15 of 86
    iOS_Guy80iOS_Guy80 Posts: 151member
    You want to play in my sandbox here are the guidelines. 
    uraharalordjohnwhorfinSpamSandwich
  • Reply 16 of 86
    gree55gree55 Posts: 2member
    You don't have to buy an iPhone, but you choose to buy one. By buying one, you have access to eco system that includes free tech support for your device provided you have not broken that user agreement. If you do break that user agreement, there is no way for Apple to reasonably help you because it would be out of scope for them to know what you've done to the devicet. With that said, you do not have to participate in the Eco System. You can choose to use the stock apps or do everything through a browser. This is not a lawsuit brought forward by developers, it's by consumers. There are other phones to buy, other ecosystems to be a part of as well. they have choice. What Apps can't they buy on the App store? Once that Apple feels may be offensive or violate laws? So be it. Don't buy an iPhone. Period. You can't play playstation only games on Nintendo, can you?
    randominternetperson
  • Reply 17 of 86
    jungmarkjungmark Posts: 6,687member
    No one is forcing you to get an iPhone. If you don’t like the App Store, you can go to Android. After all, Android is “winning”. 
    uraharaiOS_Guy80lordjohnwhorfin
  • Reply 18 of 86
    ElCapitanElCapitan Posts: 211member
    Good! 

    When Apple censors content – and that is not only happening to some US "right wing" groups and individuals, but it happens across all the countries in which they have a presence, it is time to let others have equal opportunity to bring content to the platform, just like they can on macOS.  

    It is up to the individual to decide how they use, and what content the device will carry, the minute the device is no longere Apple property. Apple is currently blocking this from happening (without possibly jailbreaking the device), and that cannot stand. 
  • Reply 19 of 86
    The problem is not with just Apple Store, but censorship. It is not Appe's business what applications should be allowed to run on device (except those that violate some local laws). We purchase that device to own it - not to lease it under strict contract. They can restrict apps on Apple Store, but then do not restrict people from haveing alternative stores. Disclaimers can be in place. I think this backfire of foolish concept of holding manufacturer liable for actions and abuse of others. So California uses that wicked logic and needs to continue along this narrative while it should verify it's foundations in the first place. Any tool in wrong hands could be misused, abused and used for illegal intent as well. No manufacturer should be liable in those cases.
    You may own the device, but you do not own the software on that device.
    iOS_Guy80qwerty52
  • Reply 20 of 86
    ElCapitanElCapitan Posts: 211member

    Ever heard of web apps?

    Which Apple dismissed early on in the life of the original iPhone, so no, that is no argument. 
    gatorguy
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