IPhone Owners Can Sue Apple Over App Store Policies

Apple is seen at a store in Zurich Switzerland

Apple is seen at a store in Zurich Switzerland

The opinion written by the newest court member, Justice Brett Kavanaugh, said consumers had a right to pursue their case because they have a direct relationship with Apple.

"We decline to green-light monopolistic retailers to exploit their market position in that way", wrote Kavanaugh, who was joined by the more liberal justices on the court.

John Lopatka, a professor of antitrust law at Penn State University, said the latest ruling does not address the merits of the lawsuit - which must go back to a lower court for trial - but adds to the pressure on companies like Apple.

Apple had argued that consumers aren't entitled to sue, since prices are ultimately set by the developers building the apps, not Apple itself.

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All App Store developers must also pay the company a 30 percent cut of apps sales. The suit charges Apple with gouging consumers through what it describes as a monopoly on apps in the App Store.

The ruling doesn't mean that the group will win any lawsuit against Apple, only that the group can sue Apple.

"The plaintiffs purchased apps directly from Apple and therefore are direct purchasers under Illinois Brick", Kavanaugh wrote in the majority opinion, citing the doctrine that prohibits indirect purchasers from suing companies for damages under antitrust law.

"Developers have a number of platforms to choose from to deliver their software - from other apps stores, to Smart TVs to gaming consoles - and we work hard every day to make sure our store is the best, safest, and most competitive in the world". Spotify did at one point offer in-app Premium subscriptions, but at a higher price than via the Web as a way of compensating for Apple's take.

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It's worth noting that the Supreme Court did not rule Apple a monopoly, but rather allowed the suit to proceed. In Apple's view, customers buy apps from developers, who in turn pay Apple a 30 percent commission for distribution services.

And that argument split the Supremes this time around, with the dissent insisting that the Illinois Brick case holds because it explicitly rejected a "pass-on theory" identical to the plaintiffs in this Apple case.

"To evade the court's test, all Apple must do is amend its contracts", Gorsuch wrote. Unlike Android, iOS customers can only get apps from that official source, which Apple says serves as kind of quality control to weed out security threats and apps that violate the company's terms of service.

Kavanaugh described this as a "straightforward" application of antitrust law and prior Supreme Court precedents.

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

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