Published: Tue, May 14, 2019
Tech | By Anita Cain

IPhone owners can sue Apple over App Store prices, Supreme Court rules

IPhone owners can sue Apple over App Store prices, Supreme Court rules

In a 5-4 ruling, with Donald Trump appointee Brett Kavanaugh siding with the court's four liberal justices, the decision essentially clears the way for a class action lawsuit against Apple to proceed.

Apple's store is far from the only one that takes a cut from developers. If an app is overpriced, the fault lies with developers and not Apple, the iPhone maker claimed. Court precedent says that indirect purchasers who are at least two steps removed in a distribution chain can not sue.

The ruling may require Apple to pay hundreds of millions of dollars to developers and make changes to its App store, the Verge previously reported.

Kavanaugh's opinion was joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Elena Kagan and Sonia Sotomayor.

"Leaving consumers at the mercy of monopolistic retailers, simply because upstream suppliers could also sue the retailers, would directly contradict the long-standing goal of effective private enforcement in anti-trust cases", he said.

Today's Supreme Court ruling doesn't decide the larger question of whether Apple actually is abusing its control over the App Store to overcharge customers.

Apple shares were trading down more than $10 at $186.84 by mid-morning. But ordinary iPhone users-those who are unwilling or unable to jailbreak or use developer tools-have no way to install apps other than through the official App Store.

"At this early pleadings stage of the litigation, we do not assess the merits of the plaintiffs' antitrust claims against Apple, nor do we consider any other defenses Apple might have", he added.

If a new report is anything to go by, Apple is getting ready to abandon a series of older iPhones with the release of iOS 13 the next September.

Dissenting from the decision, conservative Justice Neil Gorsuch, said the decision is "not how antitrust law is supposed to work" because it gives a green light to the exact type of case that the court had previously prohibited. Apple previously claimed that it was just an intermediary for purchases, but the Supreme Court ruled otherwise.

But Kavanaugh wrote that the previous decision wasn't meant "to bar direct-purchaser suits against monopolistic retailers who employ commissions rather than markups".

The case is Apple Inc. v Pepper, 17-204.

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