US Supreme Court Rules Against Apple, Allows Antitrust Suits

Daniel Fowler
May 13, 2019

The Supreme Court ruled Monday (May 13) that an antitrust lawsuit against Apple can proceed, which may spell the end of Apple's 30% commission on third-party apps. A judge could triple the compensation to consumers under antitrust law if Apple ultimately loses the suit.

The dispute hinged in part on how the justices would apply a decision the court made in 1977 to the claims against Apple. If Apple is found to be a monopolist they may have to refund billions to consumers or may even be forced to open up the iPhone to alternate app stores.

"Apple's theory would provide a roadmap for monopolistic retailers to structure transactions with manufacturers or suppliers so as to evade antitrust claims by consumers and thereby thwart effective antitrust enforcement", Kavanaugh wrote. Apple had moved to dismiss the lawsuit, stemming from litigation dating back a decade, arguing the iPhone customers couldn't sue because they weren't direct purchasers from Apple.

The case, Apple v. Pepper, was brought by iPhone users who complained that the App Store is the only place where iPhone apps are available and that, as a result, Apple has a monopoly on "the iPhone apps aftermarket". has reached out to Apple for comment on the court's decision.

"Apple's line-drawing does not make a lot of sense, other than as a way to gerrymander Apple out of this and similar lawsuits", Justice Brett Kavanaugh wrote. Apple had argued that a Supreme Court ruling allowing the case to proceed could pose a threat to e-commerce, a rapidly expanding segment of the USA economy worth hundreds of billions of dollars in annual sales.

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Apple's response was a legal classic: It claimed that the iPhone users could not sue it because they weren't purchasing Apple products directly from Apple.

Some of the justices initially seemed skeptical of Apple's claims.

Apple's store is far from the only one that takes a cut from developers.

Developers earned more than $26 billion in 2017, a 30 percent increase over 2016, according to Apple.

The Supreme Court, in a 5-4 ruling, upheld a Ninth Circuit decision concluding that the iPhone owners were direct purchasers because they bought their apps directly from Apple.

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