U.S. top court to hear Apple antitrust dispute

U.S. top court to hear Apple antitrust dispute

A majority of Supreme Court justices in oral arguments on November 26 appeared to side with plaintiffs over a technical issue of law that would send the case back to a trial court.

At issue is whether Apple's walled garden approach to its iOS platform - in which developers are pretty much forced to sell their iPhone and iPad software exclusively via Cupertino's official App Store and pay Apple a 30 per cent cut - is artificially raising prices and a violation of United States antitrust laws on monopoly control.

"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. He said he's concerned that if the ruling went against Apple, the company would be liable by both consumers and app developers for a single price increase.

The justices are hearing arguments Monday in Apple's effort to end an antitrust lawsuit that could force the iPhone maker to cut the 30 percent commission it charges software developers whose apps are sold exclusively through Apple's App Store. Today, the two parties will argue whether or not consumers are entitled to damages in antitrust cases, even when the goods were sold by third parties who actually set the prices.

Justice Brett Kavanaugh said consumers experience harm through higher prices, but also noted that plaintiffs' basis to sue is murky, because Apple doesn't purchase apps from developers and then resell them to consumers. In that case, the court ruled that damages for anti-competitive conduct can only be awarded to those who were directly overcharged, rather than indirect victims who paid an overcharge passed on by others. And iPhone apps are only available through the App Store. For 40 years, the courts have held that when there's an illegal monopoly, only the direct purchaser can sue for damages.

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However, a few of the justices expressed some skepticism with Apple's arguments. Apple collects a 30 percent commission on every sale. "I've engaged in a one-step transaction with Apple", she said.

Apple was backed by Republican President Donald Trump's administration.

Apple is being accused of breaking federal antitrust laws by monopolizing the way applications are installed on the iPhone. Frederick claims this fee structure can cause consumers to overpay for their apps when there's nowhere else to buy them.

But the 9th Circuit Court of Appeals allowed the antitrust suit to proceed on the theory that Apple acts as a distributor with monopoly power over certain products - in this instance, apps on the iPhone.

The suit, filed in federal court in Oakland, California, seeks class-action status and potentially hundreds of millions of dollars.

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