Supreme Court weighs antitrust dispute over Apple App Store

Apple,iPhone app fees,Apple iPhone App Fee Lawsuit

U.S. Solicitor General Noel Francisco was at the hearing arguing for Apple on behalf of the Trump administration.

This case dates back to 2011 when several iPhone buyers including lead plaintiff Robert Pepper of Chicago filed a class action lawsuit against Apple in a federal court in Oakland, California.

Right now, the Supremes are weighing up whether they will hear an appeal in the case of Pepper v. Apple, an antitrust legal battle centering around Cook & Co's strict control of its iOS App Store. Judges could force it to change its pricing structure and Apple may face hundreds of millions in penalties to refund some of the commission it has taken in the past four years.

Liberal Justice Elena Kagan, explaining how an App Store purchase is handled, said, "From my perspective, I've just engaged in a one-step transaction with Apple".

But the company says the popularity of software for iPhones and its App Store shouldn't obscure that consumers buys apps from developers, not Apple. Apple says that past year alone, developers earned more than $26 billion through the App Store, which offers more than 2 million apps to consumers.

Apple says the focus of the lawsuit is the 30 percent commission, something it says is paid by the developers, not the app purchasers.

Apple says it doesn't own the apps or sell them.

If the justices permit the suit to go forward, a decision against Apple would nearly certainly be a blow to its business.

Dolce & Gabbana racism row
The company would do well to acknowledge its mistakes and listen to its customers and social media commentary. The duo expressed hope that China could forgive them for their poor understanding of culture.

"This is a critical question for antitrust law in the era of electronic commerce", Apple stated in its petition. Kavanaugh pointed out that "consumers are harmed then, too".

The justices are involved because they have to settle a broader question: Can consumers even sue for damages in an antitrust case like this one? Apple cited companies like ticket site StubHub, Amazon's Marketplace and eBay.

"The Services category - which includes App Store commissions, alongside other media, content and services - is now Apple's second biggest driver of revenue after iPhone sales and has been its fastest growing source of revenues", he said.

App Association President Morgan Reed said the appeals court misunderstood the relationship between developers and platforms, improperly looking at platforms as distributors that buy from vendors and resell to customers, rather than as conduits that simply connect the two. He said the legal theory being pressed by the consumers would leave the company "subject to suit on both sides of the market" for the same conduct.

According to Reuters, Chief Justice John Roberts seemed to agree with Apple's position. When software developers offer their products, Apple reviews them for compatibility and malware and, once they are approved, charges the developer a 30 percent commission.

But consumers, he said, "are suing only for the damages that we incur".

A ruling is expected in late spring.

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