The U.S. Supreme Court ruled Monday that iPhone users can file a class-action lawsuit against Apple for allegedly violating antitrust laws.
The case stems from a lawsuit accusing the company of “unlawfully monopolizing” the retail market for iPhone apps and inflating app prices by requiring developers to pay a 30% “commission” on their sales.
The 2011 lawsuit, filed by a man named Robert Pepper and three other iPhone owners, alleges Apple locks users “into buying apps only from Apple” even if they wish to buy apps elsewhere.
The court’s newest member, Justice Brett Kavanaugh, wrote in the majority opinion that plaintiffs have the right to sue if “retailers engage in unlawful anticompetitive conduct that harms consumers.”
“That is why we have antitrust law,” he wrote.
Kavanaugh was joined by the court’s four liberal justices. The other President Trump appointee, Justice Neil Gorsuch, wrote the dissenting opinion.
Apple argued that it’s not a traditional retailer and that developers using its App Store set their own prices. Consumers, therefore, are indirectly affected by how much a developer decides to charge, the company argued in court filings.
“We disagree,” Kavanaugh wrote, adding that iPhone users purchase apps “directly from Apple and therefore are direct purchasers.”
Besides keeping 30% of app sales, Apple charges developers a $99 annual membership fee and requires prices to end with $0.99.
The court’s potentially precedent-setting opinion does not rule on whether Apple has violated antitrust law.
The American Antitrust Institute was one of several groups to file statements in support of Pepper. The nonprofit argued that barring users from suing Apple would protect “monopolistic conduct” from similar damage claims.
A ruling in favor of the company would “harm consumers not merely by denying them compensation for injuries inflicted by unlawful monopolization in cases like this, but also by substantially reducing deterrence of antitrust violations by dominant retail firms,” the group wrote.
Apple’s investors did not react well to the ruling. The company’s stocks were down by 5% Monday afternoon.
(c)2019 New York Daily News
Visit New York Daily News at www.nydailynews.com
Distributed by Tribune Content Agency, LLC.
This content is published through a licensing agreement with Acquire Media using its NewsEdge technology.