District Court judge questions expert testimony in App Store lawsuit

Posted:
in General Discussion
The U.S. District Court Judge presiding over a lawsuit accusing Apple of price-gouging on the App Store criticized the math of one of the case's expert witnesses.

Credit: Apple
Credit: Apple


Daniel McFadden, a Nobel prize-winning economist, prepared an analysis backing a claim that Apple's App Store requirements cost consumers billions of dollars. However, U.S. District Court Judge Yvonne Gonzalez Rogers didn't appear to buy that argument, Bloomberg has reported.

During questioning lawyers for the consumers in the case, Judge Gonzalez Rogers knocked McFadden's work, claiming that he provided only six paragraphs to explain his methodology and adding that he isn't "an expert in any of it."

The lawsuit alleges that Apple owes iPhone customers between $7 billion and $10 billion for charging "supra-competitive" prices for app and in-app purchases on the App Store. However, the case can only be certified as a class action representing nearly 400 million App Store users if Judge Gonzalez Rogers allows it to move forward.

At this point, it isn't clear if she will green-light the lawsuit. For example, the judge cast doubt on the way that McFadden used the Epic Games store as a benchmark for how Apple overcharges customers.

"What about the fact that it's operating at a loss for the foreseeable future?" Judge Gonzalez Rogers asked lawyers. "If you cherry pick your numbers, how is that methodology? And if I don't agree with that, doesn't the entire model fall?"

Lawyers for customers defended McFadden's work, saying that the methodology he used is "widely accepted by economists to determine and measure the effects of anticompetitive conduct on market prices" and calling the analysis "relevant, reliable, and admissible."

Earlier in 2021, Judge Gonzalez Rogers ruled largely in favor of Apple in a similar lawsuit levied by Epic Games. Despite championing her decision as a "resounding victory," Apple has appealed one portion of the ruling that would force it to allow third-party payment links or buttons within apps.

Read on AppleInsider

Comments

  • Reply 1 of 10
    LOL...if "supra-competitive" pricing really existed on the App Store, then you wouldn't need a Nobel winning economist to convince the judge to allow the lawsuit to proceed. You would simply hand the judge a list of hundreds of thousands of apps that had significantly higher prices on iOS than on Android or Mac/Windows or Playstation/Xbox/Switch. 
    uraharabaconstangwilliamlondonwatto_cobra
  • Reply 2 of 10
    I like this judge.  Sees right through the BS.
    rob53watto_cobra
  • Reply 3 of 10
    I like this judge, she fair and consider all situations. for the Nobel winner economist to come out and say such thing, I wonder who pay you or what you have against apple?
    watto_cobra
  • Reply 4 of 10
    Was anyone forced to pay for apps? Were the prices somehow hidden or false?

    If you see an app (or IAP) and you think it’s too expensive, don’t buy it. Easy. Pick any category and there are tons of apps at all different price points. The prices are all listed up front in the App Store. You can even research all this online before you buy an iPhone/iPad, so none of this should be a surprise.

    I wonder how much they’re paying their lawyers. I’ll bet it’s more in an hour or two than they’ll ever spend in two lifetimes on apps.
    edited November 2021 watto_cobra
  • Reply 5 of 10
    So this is what you do today if you don't like the price of goods - get a class action suit going or just loot the store. What a world... what a world.
    qwerty52williamlondonwatto_cobra
  • Reply 6 of 10
    rob53rob53 Posts: 2,913member
    There must NOT be a lot of pre-App Store customers being interviewed about high costs. I still remember when the Adobe CS suite cost in excess of $5K per user--and we still paid that amount! The apps in the Apple App Store cost almost nothing compared to what they cost before and SOMEONE needs to remind the judge and lawyers about this. Software is free compared to what it was 10 years ago not to mention 20.
    williamlondonwatto_cobra
  • Reply 7 of 10
    rob53 said:
    There must NOT be a lot of pre-App Store customers being interviewed about high costs. I still remember when the Adobe CS suite cost in excess of $5K per user--and we still paid that amount! The apps in the Apple App Store cost almost nothing compared to what they cost before and SOMEONE needs to remind the judge and lawyers about this. Software is free compared to what it was 10 years ago not to mention 20.
    OS updates cost money too. $129 to get the latest MacOS. The developer program was $500/year if you wanted access to the betas. And that was when Apple only had to maintain one platform.

    People think that if these lawsuits succeed, everything will just be free. Developing and maintaining 5 platforms, plus the infrastructure of the App Store, ain’t free.
    williamlondonwatto_cobra
  • Reply 8 of 10
    davidwdavidw Posts: 1,539member
    I wonder if the methodology outlined in those 6 paragraphs by this Noble prize-winning economist, mentioned anything about all the iOS developers (specially some very  profitable ones that are in the Coalition of App Fairness) that are claiming that Apple commission is costing them a good portion of their profits. How can all these developers claim that Apple commission is costing them, if this Noble prize-winning economist seems to claiming that Apple "supra-completive" commission is being paid for by the consumers buying iOS apps?  

    Could it be that these developers are passing the cost of Apple commission to their customers and are now trying their best to increase their profits, by finding ways to not pay Apple a commission? A commission that they already factored into the price of their apps or in-app purchases, that the customers are actually paying? 

    The customers buying apps and making in-app purchases are only paying what the developer charges. Apple charges the developers the commission, not the buyers. It's up to the developers to pass on what portion of it to the customers buying their apps, in order to be as profitable they they want. If they have a high gross margin, like in-app purchases of virtual dollars to buy virtual goods that cost almost nothing to produce, then the developer can choose to absorb all of the commission or only pass on a portion of it to the customers. However, if the app has a low gross margin, then the developers will have to pass all or most of the commission to the customers. It's not up to Apple to determine how much of their commission is paid for by the customers purchasing apps or with in-app purchases from the developers and how much the developers are willing to absorb.

    Apple is not forcing app purchasers to pay more for an app or for in-app purchases, than they want to pay. And Apple is not forcing developers to lose money or not make as much money as they want from selling apps or with in-app purchases, by not being able to include the cost of the commission in the price of their apps or in-app purchases. 

    But is sure seems pretty greedy for developers to include the cost of Apple commission into the price of their apps or in-app purchases and then try to avoid paying Apple a commission that they already collected. 
    watto_cobra
  • Reply 9 of 10
    gatorguygatorguy Posts: 23,364member
    davidw said:
    I wonder if the methodology outlined in those 6 paragraphs by this Noble prize-winning economist, mentioned anything about all the iOS developers (specially some very  profitable ones that are in the Coalition of App Fairness) that are claiming that Apple commission is costing them a good portion of their profits. How can all these developers claim that Apple commission is costing them, if this Noble prize-winning economist seems to claiming that Apple "supra-completive" commission is being paid for by the consumers buying iOS apps?  

    Could it be that these developers are passing the cost of Apple commission to their customers and are now trying their best to increase their profits, by finding ways to not pay Apple a commission? A commission that they already factored into the price of their apps or in-app purchases, that the customers are actually paying? 

    The customers buying apps and making in-app purchases are only paying what the developer charges. Apple charges the developers the commission, not the buyers. It's up to the developers to pass on what portion of it to the customers buying their apps, in order to be as profitable they they want. If they have a high gross margin, like in-app purchases of virtual dollars to buy virtual goods that cost almost nothing to produce, then the developer can choose to absorb all of the commission or only pass on a portion of it to the customers. However, if the app has a low gross margin, then the developers will have to pass all or most of the commission to the customers. It's not up to Apple to determine how much of their commission is paid for by the customers purchasing apps or with in-app purchases from the developers and how much the developers are willing to absorb.

    Apple is not forcing app purchasers to pay more for an app or for in-app purchases, than they want to pay. And Apple is not forcing developers to lose money or not make as much money as they want from selling apps or with in-app purchases, by not being able to include the cost of the commission in the price of their apps or in-app purchases. 

    But is sure seems pretty greedy for developers to include the cost of Apple commission into the price of their apps or in-app purchases and then try to avoid paying Apple a commission that they already collected. 
    Every one of the companies, from Apple to the developers large and small, are all in it for maximizing their profits. At the moment they're fighting over the emptying of your wallet. None of them are intending to do what's best for you, it's all about what's best for them. As consumers we just sit powerless on the sidelines and watch them battle. Individually none of us matter or have any influence on the outcome.
    muthuk_vanalingam
  • Reply 10 of 10
    Now let’s see, where is that law against price gouging and or making a profit??
    watto_cobra
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