The company argues that because the app developers themselves set the price of apps in the App Store and not Apple, iPhone users are purchasing the apps from the developers directly. The App Store generated more than $11 billion in revenue for the company in 2017. And now, Apple is asking the Supreme Court to overturn that decision.
U.S. Supreme Court justices on Monday appeared open to letting a lawsuit proceed against Apple Inc that accused it of breaking federal antitrust laws by monopolizing the market for iPhone software applications and causing consumers to overpay.
In other cases, the justices have said there must be a direct relationship between the seller and a party complaining about unfair, anti-competitive pricing.
Apple has sought to dismiss the case without a jury trial saying that the device owners have no standing to sue, as iOS developers are the ones who choose to do business with Apple and set their own prices.
But the lawsuit says the Cupertino, California-based company exerts a lot of control over the process, including a requirement that prices end in.99.
That's an important distinction because Supreme Court precedent says charges of unfair monopoly pricing must be brought by the "first buyers" in a chain of transactions.
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Software developers say that outcome would disrupt similar online marketplaces that operate between app creators and customers. And iPhone apps are only available through the App Store.
However, the plaintiffs would still have to convince district judges that Apple is exploiting a monopoly, and attempt to prove that the company's 30pc commission has raised app prices. I pay Apple directly with credit card information that I've supplied to Apple. Part of the concern, the court said in that case, was to free judges from having to make complex calculations of damages.
In an hour-long oral argument session this morning, though, some justices seemed to take a skeptical line. Under federal law, proving such an allegation could be worth millions of dollars, because awards are tripled for antitrust violations.
Apple was backed by Republican President Donald Trump's administration.
Plaintiffs argue that they "have been injured by Apple's anti-competitive conduct because they paid more for their iPhone apps than they would have paid" in a more competitive market where there were other places to buy apps, court documents state. "The App Store has fueled competition and growth in app development, leading to millions of jobs in the new app economy and facilitating more than $100 billion in payments to developers worldwide".
The seven plaintiffs in the case Apple v. Pepper have filed four antitrust class-action complaints against Apple since 2011. The 9th U.S. Circuit Court of Appeals revived it.