Major Supreme Court ruling allows iPhone owners to sue Apple for acting like a monopoly

Major Supreme Court ruling allows iPhone owners to sue Apple for acting like a monopoly
CNN reports that the U.S. Supreme Court passed down a ruling on Monday that affects Apple and other companies that offer a closed operating system. By a 5 to 4 vote, the  Supreme Court ruled that plaintiffs in a huge class action suit against Apple can try to prove that the company acted as a monopoly by raising the prices of apps for the iPhone. 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.

The case dates back to a 2011 class action suit filed by iOS users. The plaintiffs alleged that the 30% of revenue that Apple takes from developers who sell their wares through the App Store, encourages higher prices for iOS apps. And because iOS is a closed system, iPhone and iPad users are forced to purchase apps only from Apple's official storefront. Android, which is an open system, allows users to sideload apps from third-party app stores. Apple responded by saying that it is only an "intermediary" and shouldn't be a party to such a suit. With the decision today, the Supreme Court, disagrees with the tech giant.

The Supreme Court ruled 5-4 that iPhone and iPad owners directly purchase the apps from Apple, thus allowing them to sue Apple. The decision in a 1977 case called Illinois Brick Co. v. Illinois allows only direct purchasers of a product to file suits in federal court claiming violations of antitrust laws. Trump appointee, Justice Brett M. Kavanaugh, wrote the majority opinion in Apple v. Pepper, No. 17-204. He was joined by four of the more liberal justices sitting on the Supreme Court. Trump appointee Justice Neil Gorsuch wrote the dissent.

The ruling doesn't say that Apple is guilty; it says that the company can be sued for alleged antitrust violations

Justice Kavanaugh wrote that when "retailers engage in unlawful anticompetitive conduct that harms consumers," these consumers have the right to file suit against the retailers to hold them accountable for their actions. "That is why we have antitrust law," the newest Justice sitting on the Supreme Court wrote. It is important to understand that the Supreme Court has not ruled that Apple violated antitrust laws. The action taken today by the highest court in the land merely allows the class action suit to continue with Apple as the defendant. Apple told the Supreme Court that the App Store has been very successful and offers over two million apps. The company says that in 2017, it paid developers over $26 billion.

The case reached the Supreme Court following a ruling by the United States Court of Appeals for the Ninth Circuit, in San Francisco. The latter said that Apple was a "distributor" of apps. The court's three-judge panel unanimously ruled for Apple with Judge William A. Fletcher writing "Apple is a distributor of the iPhone apps, selling them directly to purchasers through its App Store."

Gene Kimmelman, president of the consumer advocacy group Public Knowledge and a former Justice Department antitrust official, says that the ruling could have a negative effect on other tech companies that, like Apple, offer a "walled-off" storefront. Kimmelman noted that today's ruling "definitely should make tech companies wonder how the antitrust laws will be applied going forward in an online platform environment." Other antitrust experts were excited by the Supreme Court's decision, especially those who criticize the tech industry for being too powerful with such power in the hands of only a few giant companies.

The decision has also led investors to dump Apple's shares. The stock is down nearly 6% or $11.55 today and is currently trading at $185.63.



1. mackan84

Posts: 547; Member since: Feb 13, 2014

I feel a breeze of 2008 coming soon mostly because of the man with a golden rug on his head. This will help.

2. oldskool50 unregistered

YES!!!! And it is a monopoly just like you said. When you have only one option to purchase the app, and Apple is taking 30% for its merchant fee is ridiculous. Credit card merchants only charge maybe 3% on a transaction. Apple is charging a flat 30%. Yes since you can only buy here, devs have to charge more for a digital app, which is small and can be replicated easily and there is no overhead, like if you were producing and shipping a application in a box. Apple claiming they are just the intermediary. You are can't be just the middle man. When you have a middle man, the middle man doesn't also own the store too. The middle man, just handles the in between the originator and the guarantee. Apple is not the middle man. A dev makes an app, it goes directly to Apple for screening and Apple decides if it meets their policy and then places it on THEIR store. There is no middle man. Windows apps can be purchased from anyone other than Microsoft. Same for Android. Apple having 100% control on iOS is a monopoly and it is anti-competitive in many ways. Not only can you not fairly compete, because you can't open an app store and be able to install apps on IOS devices, but you can only purchase them via iOS too. That's like double dipping, because we have to pay the merchant fee and Apple is taking off the top too. 30% is hefty and yes Apple isn't the only one doing it. But 10% should be the cap.

6. TheOracle1

Posts: 2331; Member since: May 04, 2015

This is very similar to what Spotify is claiming too. However Apple's behavior with them is more blatant and insidious. Part of me agrees with Apple but another part feels they've been shafting everyone for too long.

26. vgking9699

Posts: 194; Member since: Mar 01, 2019

People gonna need to start sewing google for the same thing cuz they charge 30% for the same stuff and they even charge 45% to YouTubers

27. IT-Engineer

Posts: 566; Member since: Feb 26, 2015

Nope, Android is not closed, Google doesn't force you to buy apps through play store, you can download any other app store or side load apps.

33. mackan84

Posts: 547; Member since: Feb 13, 2014

I solved it for apple. I wondered how this works in the videogame-industry so I found an old piece on it and for a ps4-game Sony takes a 11.5% cut and retailers 20% In the case where you buy the game digitally Sony keeps that extra 20% cut because they can’t undercut the retailers or their business would die together with their free advertising. Apple could force on physical cards with codes to retailer in which they only take 10% while keeping the extra 20% on digital. Apple should give me a cut for this.

41. sgodsell

Posts: 7433; Member since: Mar 16, 2013

Don't forget developers have to pay each year to keep their apps on Apple's store. Also developers are FORCED to use Apple's monetization methods so Apple can always get their cut of any monetization. Google, Amazon, and Microsoft don't FORCE any of their developers or apps to use their respective monetization methods. Developers can point to their website for any app monetizations, or use another monetization system. Apple is definitely a bully, and a Monopoly on their own app store. This needs to stop.

3. Panzer

Posts: 282; Member since: May 13, 2016

Not good for the all the " services " to fill the coffers from declining phone sales.

4. oldskool50 unregistered

That's what happens when you get lazy and put all your eggs in one basket. If apple doesn't find a way to increase revenue as iPhone sales drop, they are gonna be in trouble again. Microsoft has known for year, that the real money is in the software, not in the hardware. That's why they never made hardware. because the costs are higher. But they could have farmed that out like apple does. But after a while hardware reaches some type of peak and then software is all you have left. But apple doesn't make lots of apps, and their main ones are only available on Apple products. Unlike Windows or Android. Android is installed on 2.5B devices of all types. Not just computers. Google knows they aren't going to make much money on phones and they don't care. Hardware released in such large mass production, if you make it yourself is very costly. ask Samsung. But if all you have to do is buy someone else's hard work, then you can save and profit by charging 3 times what you paid. Can't do that with apps though. With hardware sales dropping, if Apple starts raising app costs, then again they stand to gain the most because you can only buy from them. It is a virtual monopoly. But fans will only claim Qualcomm has a monopoly. But not apple.

5. Panzer

Posts: 282; Member since: May 13, 2016

This also brings a huge mess for Apple security. Since the operating system relies heavily on vetting through the App Store how will the operating system handle malicious apps. Google has been dealing with this issue forever. It will be interesting to see how secure IOS is really is.

7. TheOracle1

Posts: 2331; Member since: May 04, 2015

This has to do with pricing and not vetting. The essence of the suit is that Apple has artificially increased the price of the apps with no recourse to the consumers and developers since they're essentially a monopoly.

8. Panzer

Posts: 282; Member since: May 13, 2016

I fully realize that. But it also opens up the door for sideloading and 3rd party app stores. A dev can simply say I don't want to pay Apple anything and sell it their site. And if Apple blocks that transaction it would further continue the said monopoly. Hence you bring in the security issue.

14. TheOracle1

Posts: 2331; Member since: May 04, 2015

I don't think so. The original reporting by CNN kind of stressed that the suit was about the 30% being excessive. They seemed to concede that they would have to pay something but not 30%. Either way Apple can't be forced to accept non-vetted apps therefore sideloading wouldn't come into it. The same way Google can ban apps for various reasons.

40. sgodsell

Posts: 7433; Member since: Mar 16, 2013

Apple has to allow others to use different monetization methods. As it stands today Apple FORCES any and all monetization to go through them, so Apple always gets a cut no matter what. Both Google, Amazon, and Microsoft app stores don't force any developer or their apps to use their respective monetization methods. Apple has to allow others and their apps to use different payment methods. It's bad enough that developers have to pay each and every year to place their apps on Apple's app store, and to keep their apps their. Apple has to allow other payment methods, period. Apple is afraid of losing that control, but Apple is definitely abusive and monopolistic with their own app store.

9. apple-rulz

Posts: 2186; Member since: Dec 27, 2016

Consumers do have a choice-leave Apple products and go to android/Windows, etc. Problem solved. I don’t know anything about politics or law, so I’m not sure if Trump or the US attorney general can override Supreme Court rulings, but if they can, this ruling against Apple definitely needs to be done away with.

10. Alcyone

Posts: 476; Member since: May 10, 2018

Haha. You're funny. Take a class in ethics and morals. Even if a person leaves iOS, Apple would still be in the wrong. *bell rings* Time for you to go back to school.

12. TheOracle1

Posts: 2331; Member since: May 04, 2015

Well there you have it. You've cemented your name as apple-foolz. The Supreme Court and three branches of government are taught in middle school. It's called Civics. But I guess you hadn't left the trailer park by then. Neither the AG or tRump can "override" the Supreme Court. Errrmm that's why they're called the Supreme Court.

19. apple-rulz

Posts: 2186; Member since: Dec 27, 2016

Oh ok genius, so anyone that took civics class in middle school has no further need of an education or training in law, they would have learned it all in civics class. Got it.

29. sgodsell

Posts: 7433; Member since: Mar 16, 2013

Are really that dumb Apple-rulz? First of all Apple FORCES all developers and their apps to use Apple's monetization system. You cannot use any other payment systems, or a company cannot use their own website for payments. That alone is definitely not fair, period. Google and Microsoft don't FORCE any of their developers or apps to go through their monetization systems. It's why Fortnite, Spotify, Minecraft and many other apps also support other payment methods on Google's play store. This is where Apple is a bully on their app store. I am so glad Apple is going to get sued. I also hope Apple is FORCED to allow other payment methods. Apple needs a good kick in the teeth.

38. TheOracle1

Posts: 2331; Member since: May 04, 2015

The supreme law in the US is the constitution. You don't need a law degree to understand the functions of the three branches and their powers. For you to talk about "overriding" anything shows your stupidity. Simple.

17. lyndon420

Posts: 6822; Member since: Jul 11, 2012

You can say the same thing about Google and how they've been treated with all these antitrust monopoly accusations.

30. sgodsell

Posts: 7433; Member since: Mar 16, 2013

Lyndon420 Google doesn't FORCE it's developers or their apps to use Google's monetization system. Apple however does FORCE all apps that use monetization to go through them. It why Fortnite, Minecraft, Spotify, and lots of other apps can use their own payment methods on Google's play store. But Apple is a bully an FORCES everyone to go through them. Can you not see how Apple is a bully on their own app store. Why do you think Spotify and others got together and went after Apple. Because Spotify is FORCED to pay 30% on Apple's app store, yet Spotify on Google Play can use other payment methods. Plus Apple's Music isn't subject to any 30% fee. Try to remember Spotify was streaming music before Apple decided to make Apple Music. I so glad Apple is getting kicked down right now, because Apple is truly a bully on their own app store. If you cannot see that, or you agree with Apple, then you are truly dumb.

11. Knownhost

Posts: 109; Member since: Nov 13, 2017

The same apps are available on Android. How can Apple be a monopoly on apps when the consumer has the choice to access content on a different product? That's like demanding that I have the option for a convertible top on my F-150 pickup. Other vehicles have convertible tops, and Ford has a monopoly on F-150s. Right?

20. Vancetastic

Posts: 1541; Member since: May 17, 2017

With your Ford, you can change the engine to whatever you want, once you buy it. Car analogies don’t work here.

23. Knownhost

Posts: 109; Member since: Nov 13, 2017

Jailbreak your iPhone and sideload whatever you want.

28. IT-Engineer

Posts: 566; Member since: Feb 26, 2015

You people dont bother to understand the ruling. Google doesn't force any developer to accept payments through the play store only like apple is doing. And Google doesn't force you to use play store. Android is open, you can download any app or any other app store besides Google or side load. Apple doesn't allow you to do that.

13. Valdomero

Posts: 697; Member since: Nov 13, 2012

They're a monopoly, I pay Spotify out of the Apple Store bubble and it's like $1 less. The same happens with Netflix, Crunchyroll or any other subscription based app. They have not added Siri integration with Spotify so users can find it difficult to ask Siri to play X song. They even steal developers' ideas by removing their "Screen Time" apps and adding new features to their own "Screen Time" feature in settings.

32. wickedwilly

Posts: 723; Member since: Sep 19, 2018

Apple definitely needs to be rained in. There is no doubt it is abusing its position and closed ecosystem to gain the same benefits a monopoly has.

34. iloveapps

Posts: 855; Member since: Mar 21, 2019

Android wants app store down. Jealous!

46. MrMalignance

Posts: 300; Member since: Feb 17, 2013

Don't troll when you don't understand the argument. Go sit at the kids table, adults are talking

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