Apple's App Store Legal Battle Heads To The Supreme Court

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Apple says that the app developers are the ones who set the price of their apps; the plaintiffs counter that Apple is to blame because the company takes a 30% cut of an app's revenue. Pepper, the outcome of a federal lawsuit filed in 2011, alleged that Apple's total control over which apps may be sold and its mandatory 30-percent commission violated antitrust rules. In that earlier ruling, the top court limited damages in monopoly-related cases to only those directly harmed instead of anyone who indirectly was overcharged.

His comments could align him with justices who would allow the suit to proceed.

That relationship makes Apple the proper target of an antitrust lawsuit, they said. I pay Apple directly with credit card information that I've supplied to Apple. Justice Stephen Breyer, who used to teach antitrust law at Harvard Law School, said the consumers' case seemed straightforward and in line with a century of antitrust law.

Several justices appeared skeptical of Apple's argument. A federal judge in Oakland threw out the suit, saying the consumers were not direct purchasers because the higher fees they paid were passed on to them by the developers.

A trial court initially dismissed the suit.

Generally speaking, liberal justices were more eager to move forward with the protection of consumers in mind, while the more conservative Justices, especially Trump-appointees, were afraid that this precedent would hinder future e-commerce growth. "Consumers do not pay the 30 percent commission", the company's attorney, Daniel Wall, told the court. Currently, the App Store is the only official way to download apps for your iPhone or iPad.

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A ruling against Apple could add to pressure the company already is feeling because of disappointing iPhone sales. Its argument: the company is merely providing a marketplace for the apps. "The phrase "there's an app for that" is now part of the popular lexicon", Chief Justice John Roberts noted in a 2014 decision limiting warrantless searches of cellphones by police.

Though developers set the prices of their apps, Apple collects the payments from iPhone users, keeping a 30% commission on each purchase.

David Frederick, the lawyer representing consumers, argued that "there's no middleman in this particular transaction" as Apple maintained.

'Any matchmaking service that operates on the internet from DoorDash to Etsy is going to be subject to duplicative damages, ' said Marianela Lopez-Galdos, director of competition and regulatory policy at the Computer & Communications Industry Association, which backs Apple in the case. "That is the higher than what a competitive market price would be for apps". Apple, of course, argues that the plaintiffs shouldn't be allowed to sue it over the app sales because Apple says it isn't selling the apps directly to consumers, it's just passing them along from the developers as a kind of middle man.

"What we know is what the price is in a noncompetitive market, and we will have to have experts that will assess what the damages would be in a competitive market", he said.