Supreme Court ruling could threaten Apple’s 30 percent app commission

Supreme Court ruling could threaten Apple’s 30 percent app commission

A group of iPhone owners accusing Apple of violating U.S. antitrust rules because of its App Store monopoly can sue the company, the Supreme Court ruled Monday.

"So if the commission is in fact a monopolistic overcharge, the developers are the parties who are directly injured by it. Plaintiffs can be injured only if the developers are able and choose to pass on the overcharge to them in the form of higher app prices that the developers alone control".

In response, Apple pointed to decades-old Supreme Court precedent that found only the "direct purchasers" of a service are eligible to bring such an antitrust lawsuit in the first place. Apple also claimed that because they don't set the retail price of the apps on the store, iPhone users can not sue them.

Kavanaugh was joined by liberal justices Ruth Ginsburg, Elena Kagan, Stephen Breyer and Sonia Sotomayor.

The case dates back to a 2011 class action suit filed by iOS users. That the company is "monopolizing" the sale of apps and games in its store and that the store's rules are artificially inflating prices for those apps.

Apple posits that allowing only the upstream app developers - and not the downstream consumers - to sue Apple would mean more effective antitrust enforcement. President Trump's second nominee to the high court faced fierce Democratic opposition during his confirmation process, over sexual misconduct allegations as well as his judicial philosophy. Following the ruling, Apple shares dropped by five percent - the stock was already under pressure due to the tariff dispute between the US and China.

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"Once you allow iPhone users to get apps elsewhere, the case disappears", he said.

In a statement, Apple said, "We're confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric".

They claim that this puts Apple in breach of anti-trust laws.

When I initially wrote up the case, I described Apple's argument as "confusing and counterintuitive". That's not an easy calculation to do-and it's not a problem that comes up if developers sue Apple instead.

Kavanaugh described this as a "straightforward" application of antitrust law and prior Supreme Court precedents.

Apple shares were trading down more than $10 at $186.84 by mid-morning.

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