Justices deal blow to Apple over App Store lawsuit
The Supreme Court on Monday said that iPhone users can proceed with a class-action lawsuit against Apple over its control of app sales in a ruling that could threaten the company’s exclusive marketplace of third-party software.
A group of consumers had sued Apple, claiming that the company’s monopoly over its App Store led to inflated app prices. Apple disputed the legality of the suit, arguing the consumers had no standing to sue the company because it merely operated the App Store as an intermediary between users and the developers who make and sell apps.
The twist: Justice Brett Kavanaugh wrote the opinion for the 5-4 decision, surprising many by breaking with his conservative colleagues and siding with the court’s liberal justices.
The Supreme Court had ruled in 1977 in a case called Illinois Brick that only “direct purchasers” of products have standing to bring antitrust lawsuits. In his decision, Kavanaugh rejected Apple’s argument that it was the app developers, and not the company operating the App Store, that sold the programs directly to users.
“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.
The dissenters: Leading the dissent for the four conservatives was Justice Neil Gorsuch — who, like Kavanaugh, is a Trump appointee. Gorsuch argued that if Apple’s App Store practices are indeed monopolistic, than it would be the app developers who are harmed and have standing to sue and not the consumers. Gorsuch was joined by Chief Justice John Roberts and Justices Samuel Alito and Clarence Thomas.
Apple’s response: Apple in a statement denied that the App Store was a monopoly.
“Today’s decision means plaintiffs can proceed with their case in District court. We’re confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric,” the company said in a statement to The Hill.
“The vast majority of apps on the App Store are free and Apple gets nothing from them,” the company added. “The only instance where Apple shares in revenue is if the developer chooses to sell digital services through the App Store.”
Why Silicon Valley is taking notice: The decision comes as Apple and other tech companies face growing antitrust scrutiny over the way they operate their platforms. The high court provided a rare win for antitrust reformers, who see large tech companies as a unique threat to competition and consumers.
