Supreme Court Allows Consumers to Sue Apple Over Alleged App Store Monopoly

Consumers can sue Apple for using its alleged App Store monopoly to drive up app prices (see 1811260039), the Supreme Court ruled 5-4 Monday. Justice Brett Kavanaugh sided with four liberal justices, writing an opinion allowing a class action lawsuit to proceed in Apple v. Robert Pepper, docket 17-204. Protecting consumers from monopoly prices is “the central concern of antitrust,” under the Sherman Act, Kavanaugh wrote. “The consumers here purchased apps directly from Apple, and they allege that Apple used its monopoly power over the retail apps market to charge higher-than-competitive prices.” Apple, with the backing of the Trump administration and various industry groups, argued that pass-through harm can lead to duplicative damages in conflict with Illinois Brick Co. v. Illinois. Apple suggested only app developers should have the right to sue. Illinois Brick “does not bar the consumers from suing Apple for Apple’s allegedly monopolistic conduct,” Kavanaugh wrote. Consumers bought apps from third-party app developers at prices set by developers, Justice Neil Gorsuch dissented. The issue is that the 30 percent commission Apple charges developers falls initially on the developers, Gorsuch wrote. “So if the commission is in fact a monopolistic overcharge, the developers are the parties who are directly injured by it.” This is the pass-on theory Illinois rejected, he continued. Chief Justice John Roberts and Justices Clarence Thomas and Samuel Alito joined the dissent. Monday’s decision “puts multi-sided business models at risk of expensive, duplicate claims,” Computer & Communications Industry Association CEO Ed Black said.