US Supreme Court: iPhone users can sue Apple for App Store monopoly

In a decision that could significantly affect the company worldwide, the United States Supreme Court has given the green signal for consumers to sue Apple for the alleged monopolization of its App Store.

. A 5-4 majority of the Supreme Court upheld a decision of the US Court of Appeals Ninth Circuit that went against the company that manufactures iPhones. The District Court had initially ruled in favour of Apple.

. As per the facts, Apple sells iPhone applications directly to iPhone owners through its App Store, the only place where iPhone owners may lawfully buy apps. Most apps are made by independent developers who have contracts with Apple. The developers are charged a $99 membership fee, and Apple charges them a 30% commission on the sale of every app.

. In this background, four iPhone users had approached the courts, alleging that Apple has unlawfully monopolized the market for iPhone apps. It was argued that this monopoly power over the retail apps market enables Apple to charge higher-than-competitive prices. The same would be in violation of antitrust laws, it was contended.

. Apple defended its stance, arguing that iPhone owners could not sue as they were not direct purchasers from Apple. The judgment in Illinois Brick Co. v. Illinois was cited in this regard.

. The company further contended that allowing only the upstream app developers, and not the downstream consumers, to sue Apple would mean more effective enforcement of the antitrust laws. However, the US Supreme Court dismissed this argument, holding,

. “We do not agree. Leaving consumers at the mercy of monopolistic retailers simply because upstream suppliers could also sue the retailers makes little sense and would directly contradict the longstanding goal of effective private enforcement and consumer protection in antitrust cases.”

. The majority further held,

. “…if accepted, 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.”

. The Court also cited Section 4 of the Clayton Act – the legislation that governs antitrust laws in the country – to note that “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue.”

. Therefore, the Court held that after taking Illinois Brick into consideration, iPhone users were direct purchasers who can sue Apple for the alleged monopolization.

. The majority decision was delivered by Justices Kavanaugh, Ginsburg, Breyer, Sotomayor , and Kagan . Chief Justice Roberts along with Justices Gorsuch, Thomas and Alito dissented.

. Read the judgment:

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US Supreme Court: iPhone users can sue Apple for App Store monopoly

Aditya AK

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