Supreme Court rules against Apple in lawsuit targeting App Store

Supreme Court rules against Apple in lawsuit targeting App Store

Indeed, another Trump appointee - Justice Neil Gorsuch - wrote in the dissenting opinion about this ruling that app developers have more legitimate standing to contend with Apple, not consumers.

A narrowly divided Supreme Court is allowing a group of consumers to move forward with a lawsuit charging that Apple overcharges customers for app store purchases.

One of the judges who ruled against Apple was President Donald Trump's controversial appointment, Brett Kavanaugh.

Apple argued that the iPhone owners do not have the right to sue because Apple is an intermediary. Apple also reiterated that developers set the price they want to charge, and noted that the majority of apps are free, in which case Apple gets nothing from them.

The Google Play store, Apple's chief rival to the App Store, takes a similar cut of up to 30 per cent from developers for app sales. Consumers have been harmed by the practice, the suit claimed, because Apple does not allow customers to download apps from any other source other than the iTunes App Store. 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.

In a 5-4 decision, the Supreme Court sided with four iPhone owners who contend the company has been inflating prices on the App Store -which is now the only official place to download apps for iOS devices.

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The court's other four conservatives, on the other hand, bought Apple's argument that what ultimately mattered was the fact that app developers-not Apple-determined app prices.

It is important to understand that the Supreme Court has not ruled that Apple violated antitrust laws. Apple told the Supreme Court that the App Store has been very successful and offers over two million apps. This could be a very expensive decision against Apple; plaintiffs who win an antitrust suit can be awarded three times the amount of the damages that they are asking for.

"To evade the court's test, all Apple must do is amend its contracts", Gorsuch wrote. The company says that in 2017, it paid developers over $26 billion. The Supreme Court ruled against Apple on Monday by 5 votes to 4.

It is worth noting that neither side really dug into the realities of app stores and digital marketplaces, relying instead on precedents about bricks and shoes (Hanover Shoe v United Shoe Machinery, 1968) to make their case.

The Supreme Court further added that "this is not a case where multiple parties at different levels of a distribution chain are trying to recover the same passed-through overcharge initially levied by the manufacturer at the top of the chain".

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