Apple stands accused of breaking federal antitrust laws by monopolizing the market for iPhone apps and causing consumers to pay more than they should.
The company is appealing a lower court decision that revived the proposed consumer class-action lawsuit. The California-based technology company said that siding with the iPhone users who filed the lawsuit would threaten the burgeoning field of e-commerce, which generates hundreds of billions of dollars annually in US retail sales.
The plaintiffs, as well as antitrust watchdog groups, stated that if the justices close courthouse doors to those who buy consumer products, monopolistic conduct could expand unchecked.
“A lot of tech platforms will start making the argument that consumers don’t have standing to bring antitrust suits against us,” said Sandeep Vaheesan, legal director for the Open Markets Institute, a Washington-based antitrust advocacy group.
“Uber could say, we’re just providing communication services to ride-sharing drivers,” Vaheesan further said, referring to the popular ride-sharing company. “If there’s an antitrust issue, the drivers can bring a claim but passengers do not have standing.”
iPhone users had accused Apple of violating federal antitrust law by monopolizing the sale of paid apps, leading to inflated prices compared to if apps were available from other sources.
While developers set the prices of their apps, Apple collects the payments from iPhone users, keeping a 30% commission on each purchase. One area of dispute in the case is whether app developers recoup the cost of that commission by passing it on to consumers. Developers earned more than $26 bn in 2017, a 30% increase over 2016, according to the company.
The company sought to have the antitrust claims dismissed, saying the plaintiffs lacked the required legal standing to bring the lawsuit.
The claims against Apple date back to 2011– when several iPhone buyers including lead plaintiff Robert Pepper of Chicago had filed a class action lawsuit against Apple in federal court in Oakland, California. That suit was initially thrown out, after it was ruled that consumers could not be classified as direct purchasers.
The San Francisco-based 9th US Circuit Court of Appeals last year revived the lawsuit, deciding that Apple was a distributor that sold iPhone apps directly to consumers.