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Apple grilled on App Store pricing

29 November, 2018, 07:19 | Author: Joanna Little
  • Apple approaches US Supreme Court to block customers from suing it for monopoly abuse

"We are hopeful the Supreme Court will recognize Apple's critical role as a marketplace for apps, and uphold existing legal precedent by finding in favor of Apple and the millions of developers who sell their apps on our platform", the spokesperson said. The users argued that Apple was only able to charge the 30% mark-up because it wielded monopoly power over the distribution of iPhone apps.

In the case of iPhone apps, developers are "direct" purchasers, while consumers are only "indirect" purchasers - and therefore unable to sue Apple - the company contends. "From my perspective, I've just engaged in a one-step transaction with Apple", Kagan said.

In other cases, the justices have said there must be a direct relationship between the seller and a party complaining about unfair, anti-competitive pricing. The nine justices will hear arguments in Apple's bid to escape damages in a lawsuit accusing it of breaking federal antitrust laws by monopolizing the market for iPhone apps and causing consumers to pay more than they should. Chief Justice John Roberts, a George W. Bush appointee, nevertheless suggested he sides with Apple and seemed concern that Apple could end up being held liable by both consumers and app developers. Its argument: the company is merely providing a marketplace for the apps.

The app store is 'really unique, ' said Mark Rifkin, one of the lawyers pressing the suit.

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"Apple's intentionally closed system prevents competition", says David Frederick, a lawyer representing the customers, "which enables the App Store to collect a higher price than if Apple were forced to entice app seekers in a competitive market". Under this long-standing legal doctrine, customers who bring in their laundry can not sue. Developers earned more than $26 billion in 2017, a 30% increase over 2016, according to Apple. In that earlier ruling, the top court limited damages in monopoly-related cases to only those directly harmed instead of anyone who indirectly was overcharged.

Apple is supported by Apple fanboy President Donald (Prince of Orange) Trump's administration.

The claims against Apple date to 2011 when several iPhone buyers including lead plaintiff Robert Pepper of Chicago filed a class action lawsuit against Apple in federal court in Oakland, California. However, the plaintiffs are backed by the attorneys general of 30 states including California, Texas, Florida and NY. On that basis, a federal judge in San Francisco threw the lawsuit out, concluding that Apple didn't sell anything directly to iPhone consumers. A judge could triple the compensation to consumers under antitrust law if Apple ultimately loses the suit. The 9th U.S. Circuit Court of Appeals revived it.

The court will rule by June in the latest case, Apple v. Pepper, 17-204.



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