Arthur J. Villasanta – Fourth Estate Contributor
Washington, DC, United States (4E) – Apple, Inc stands to lose billions of dollars — while millions of customers stand to spend less for its apps — should the U.S. Supreme Court rule against the tech company in a landmark case accusing it of breaking federal antitrust laws by monopolizing the market for iPhone apps, thereby forcing consumers to pay more than they should.
The Supreme Court has agreed to hear a class-action lawsuit brought by iPhone buyers over commissions Apple receives through its App Store. Its decision will determine how antitrust complaints are handled against a wide range of e-commerce sites, including Amazon and eBay. The case might expand the threat of antitrust damages against companies in e-commerce, which generates hundreds of billions of dollars annually in U.S. retail sales.
Legal experts said the case will depend on whether Apple can be held responsible by consumers for the price of the apps they download. The Supreme Court said it will hear Apple’s attempt to dismiss a lawsuit that alleges its App Store is anti-competitive and has inflated the price of iPhone apps.
Plaintiff Robert Pepper, an iPhone owner from Chicago, and others are seeking class action status for their complaint that Apple has “monopolized” the software market for iPhones by forcing developers to sell apps exclusively through its online App Store.
Apple takes a 30 percent commission on upfront prices and in-app payments through the App Store, which has generated tens of billions of dollars over the last decade.
The case will undoubtedly see the Supreme Court re-examine the contentious “Illinois Brick Doctrine.” Promulgated by the court in 1977, the doctrine declares that only the direct victims of monopolist behavior can claim damages, not customers who purchase goods via an intermediary.
“This case is about whether consumers have antitrust standing to sue Apple for the commission Apple charges app developers,” said Apple. “This case presents issues of national importance given the increasing prevalence of electronic commerce and the agency sales model.”
Apple claims it acts merely as a marketplace, allowing developers to set their own prices for their apps. It then serves as an agent for these developers by delivering their products to consumers. Because it’s an intermediary, Apple argues that only app developers — and not app buyers such as Pepper and the other plaintiffs — can bring an antitrust case against it under the Illinois Brick Doctrine.
On the other hand, the plaintiffs argue that because they paid Apple for the apps directly and the company “kept all the monopoly profits for itself,” the plaintiffs say they don’t meet the definition of a “direct purchaser” under the Illinois Brick ruling.
“The stakes for antitrust law are quite significant,” said Mark Lemley, professor at Stanford Law School. “The court has an opportunity to revisit the rule that prevents end customers — the people antitrust law is supposed to benefit — from suing to enforce the law. While Apple wants to make it even harder for customers to sue, most antitrust scholars think it should be easier.”
Article – All Rights Reserved.
Provided by FeedSyndicate