US Supreme Court To Hear Apple Appeal In App Store Monopoly Case

The US Supreme Court said on Monday it would hear Apple’s appeal in a proposed class-action lawsuit over App Store fees, a case that could have a broad impact on the huge e-commerce industry, including market leaders such as Amazon and eBay.

Apple is appealing a lower court’s revival of the proposed lawsuit, which focuses on the large commissions Apple charges to App Store developers.

The lawsuit alleges Apple’s practice of charging developers 30 percent of their software sales, and its requirement that apps are exclusively distributed via the App Store, mean higher prices for consumers, in violation of federal antitrust laws.

Apple argues the consumers who brought the case lack legal standing, arguing that it acts as an intermediary for software developers, and charges its fees to them.

App exclusivity

A 1977 Supreme Court decision limits damages for anti-competitive conduct to those who are directly overcharged, rather than indirect victims of charges passed on by others.

An Oakland, California federal judge threw out the original 2011 case, saying consumers were not direct purchasers since the fees they paid were passed on to them by developers.

But last year a San Francisco appeals court revived the case, saying Apple is a distributor that sells apps directly to consumers, and as such must face the antitrust claims.

The case could affect other companies that operate marketplaces on behalf of third-party sellers, such as eBay, Amazon, Google and Facebook, Apple told the Supreme Court in its appeal.

‘Critical question’

“This is a critical question for antitrust law in the era of electronic commerce,” the company argued.

The lawsuit seeks class-action status, and a lawyer pressing the case has said Apple could be liable for hundreds of millions of dollars in fines.

In their filing, the lawyers pressing the case said consumers “are undoubtedly the first party in the distribution chain to buy from the monopolist”.

Apple said the App Store created a “dynamic new industry”, with developers earning more than $20 billion (£15bn) through it in 2016 alone, and more than 2 million apps on offer.

The court is to hear arguments and rule during the nine-month term beginning in October.

What do you know about the history of the Mac?Try our quiz!

Matthew Broersma

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

Recent Posts

Generative AI Not Replacing UK Jobs, Study Finds

Study finds UK organisations broadly deploying generative AI to support existing jobs, but execs say…

3 hours ago

Google Must Face Trial In Ad Tech Monopoly Case

Google loses bid for summary judgement as judge says 'too many facts in dispute' as…

16 hours ago

Silicon In Focus Podcast: Feeding the Machine

Learn how your business can meet the challenges associated with managing data across multiple platforms…

16 hours ago

Apple, Meta Likely To Face EU Antitrust Charges

Apple, Facebook parent Meta reportedly likely to face EU antitrust charges before August under new…

16 hours ago

Adobe Shares Jump On AI Success

Adobe shares post biggest gains in more than four years after it reports user take-up…

17 hours ago

Winklevoss’ Gemini To Pay $50m In Crypto Fraud Settlement

Winklevoss twins' Gemini Trust to pay $50m to settle cypto fraud claims over failed Gemini…

17 hours ago