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Supremes will decide if Apple is a monopolist

by on19 June 2018

Repeat offender

The Supreme Court will review a 2011 class-action lawsuit against Apple, accusing the company of operating an illegal monopoly by not allowing iPhone users to download mobile apps outside of its own App Store and reduce consumer choice.

The case, being referred to as Apple Inc. v. Pepper, could have wide reaching implications for consumers as well as other outfits like Amazon.

For those who came in late, the dispute is over whether Apple, by charging app developers a 30 percent commission fee and only allowing iOS apps to be sold through its own store, has inflated the price of iPhone apps. Apple, supported by the Trump administration, argues that the plaintiffs in the case -- iPhone consumers - don't have the right to sue under current antitrust laws in the U.S.

The case marks a rare instance in which the court has agreed not only to hear an antitrust case, but also one where no current disagreement exists in the circuit courts. The outcome could change decades of antitrust legal precedent - either strengthening or weakening consumer protections against monopolistic power. The case also represents a huge source of revenue for Apple - the company raked in an estimated $11 billion last year in App Store commissions alone.

The lawsuit centres around another Supreme Court case from 1977, Illinois Brick Co. v. Illinois, which established what is known as the Illinois Brick Doctrine which says you can't sue for antitrust damages if you're not the direct purchaser of a good or service.

Apple does have form when it comes to antitrust issues. In the past it was caught trying to run a pricing cartel with publishers to knock Amazon out of the market.



Last modified on 19 June 2018
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