Supreme Court Allows Antitrust Suit Against Apple to Move Forward

The Supreme Court ruled on Monday that the antitrust lawsuit centered around Apple’s signature marketplace, the App Store, will be allowed to move forward.

The plaintiffs in the suit have argued that Apple uses its monopoly power over its App Store to overcharge consumers. The technology powerhouse reportedly takes a 30 percent commission from the software developers vending their apps on the platform, prohibits them from taking their business elsewhere, and dictates that prices must end with 99 cents, according to the New York Times.

The suit is reportedly centered around the percentage Apple takes from developers, which users have argued is unfair, echoing similar sentiments expressed by app developers. On the opposing side, Apple argued that iPhone users should not be able to bring the suit forward as developers set their own prices, and thus are the ones engaging in transactions with consumers.

However, in a 5-4 opinion, the Supreme Court ruled that iPhone users can move forward with their antitrust case against the technology company. In a surprising turn of events, Justice Brett Kavanaugh aligned himself with the more liberal justices on the court, ultimately writing the majority opinion. President Trump’s 2017 nominee, Neil Gorsuch, wrote the dissenting opinion and accused the majority of creating an “artificial rule.”

“Apple’s line-drawing does not make a lot of sense, other than as a way to gerrymander Apple out of this and similar lawsuits,” Kavanaugh wrote. “A claim that a monopolistic retailer (here, Apple) has used its monopoly to overcharge consumers is a classic antitrust claim. But Apple asserts that the [iOS users] in this case may not sue Apple because they supposedly were not ‘direct purchasers.’ We disagree. The plaintiffs purchased apps directly from Apple and therefore are direct purchasers.”

The backlash Apple faces is grave, as successful antitrust plaintiffs are entitled to triple the damages, and a ruling against Apple’s practices could thwart the company’s long term business strategy. As noted by the Times, “Apple has tried to shift its business to rely more on revenue from sales of apps and other services instead of iPhones. A ruling that hit Apple’s revenue from app sales would hurt that strategy.”

Apple shares were reportedly down five percent on Monday, and some of the investors were reportedly influenced to sell by the Supreme Court ruling.