Apple iPhone. Supreme Court. Image by Lenny Ghoul

Supreme Court Rules Antitrust Lawsuit Against Apple Can Move Forward

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Robert Pepper and other iPhone users antitrust lawsuit can move forward against tech company Apple, the Supreme Court ruled on Monday.

CNN explains that the case “stems from a 2011 class-action suit by iPhone owners alleging that by taking a 30% cut of app sales, Apple has encouraged app developers to raise their prices in response.”

The suit alleged’s consumers have been harmed by Apple’s practice, “because Apple does not allow customers to download apps from any other source other than the iTunes App Store.”

Courthouse News reports that the case was dismissed when a “federal judge cited Illinois Brick,” a 1977 case that said, “alleged monopolists can be sued only by people who are directly impacted by the companies’ conduct.” In 2017 the Ninth Circuit reversed that decision.

Supreme Court Justice Brett Kavanaugh, joined by the Court’s four liberal justice’s, writes the opinion for the majority, explaining that the Court did not, “assess the merits of the plaintiffs’ antitrust claims against Apple, nor do we consider any other defenses Apple might have.”

He continued, “We merely hold that the Illinois Brick direct purchaser rule does not bar these plaintiffs from suing Apple under the antitrust laws. We affirm the judgment of the U. S. Court of Appeals for the Ninth Circuit.”

Justice Neil Gorsuch, wrote the dissent, he was joined by Chief Justice John Roberts, and Justices Clarence Thomas and Samuel Alito.

In his dissent he explains that since the commission is charged to the developer and not the iPhone owner, that the court might have to “hear testimony to determine the market power of each app developer, how each set its prices and what it might have charged consumers for apps if Apple’s commission had been lower?” 

He went on to write, “Will the court also consider expert testimony analyzing how market factors might have influenced developers’ capacity and willingness to pass on Apple’s alleged monopoly overcharge?”

Apple told CNN, “the App Store is not a monopoly by any metric. Developers set the price they want to charge for their app and Apple has no role in that.”

Courthouse News reports that during an interview Pepper’s lawyer, David Frederick noted, “Kavanaugh came to the Supreme Court with significant experience in antitrust law. He said this led him to anticipate that the newest justice might be receptive to their arguments.”

Frederick went on praise Kavanaugh’s decision stating it “vindicates rights of consumers.”