Friday , November 27 2020

Apple Faces Supreme Court in the App Store Monopoly Battle

The Supreme Court is considering whether Apple's App Store is a monopoly and if consumers can sue the company over it.

On Monday, the court heard oral arguments in a long-standing legal battle that could shake Apple's strict control over the iOS ecosystem. Currently, App Store is the only official way to download apps for your iPhone or iPad. But in 2011, a group of consumers filed a class action suit, claiming the model was an antitrust violation.

"Our assertion is that with multiple sellers, multiple suppliers of apps, we would be able to buy them [the apps] at a lower price, "David Frederick, an attorney representing consumers, told the high court, according to an official transcript.

Apple, however, wants the Supreme Court to dismiss the suit. Its argument: the company is just providing a market for the apps.

During the oral arguments, the court has focused on how Apple extracts revenue from the App Store: With each sale, the company takes a 30 percent cut from the developer. Frederick claims this fee structure can cause consumers to overpay for their apps when there's nowhere to buy them.

In its defense, Apple said the company is not playing a role in setting an app's price; that decision is up to the app's developer. "Consumers do not pay the 30 percent commission," the company's attorney, Daniel Wall, told the court.

However, some of the justices have expressed some skepticism with Apple's arguments. The plaintiffs are claiming their injury is the suppression of a cheaper price, "Justice Sonia Sotomayor told Wall.

Justice Elena Kagan also said that all app purchases occur through Apple, not through the developer. "I pay Apple directly with the credit card information I've provided to Apple. From my perspective, I've just been involved in a one-step deal with Apple," she said.

Apple requested the Supreme Court to hear the case in 2017 after a lower federal court overturned an earlier attempt by the company to overturn the class-action lawsuit against it. If the Supreme Court rules against Apple, the company risks facing more antitrust lawsuits and the prospect of paying millions in damages.

Source link