Monday , September 27 2021

US anti-trust case over iPhone app sales

Apple is at the Supreme Court to defend the way it sells apps for iPhones against claims by consumers that the company has unfairly monopolised the market.

The lawyers are hearing arguments on Monday in Apple's efforts to end an antitrust lawsuit that would force the iPhone maker to cut the 30 percent commission it charges software developers whose apps are sold exclusively through Apple's App Store.

A judge could triple the compensation to consumers under antitrust law if Apple ultimately loses the lawsuit.

Apple says it does not own the apps or sell them. That's the responsibility of software developers.

But the lawsuit says the California-based company exerts a lot of control over the process, including a requirement that prices end in .99. And iPhone apps are only available through the App Store.

The issue for the Supreme Court is whether Apple can even be sued over the apps, given its prior high court rulings in antitrust cases. In other cases, the justices have stated there must be a direct relationship between the seller and a party complaining about unfair, anti-competitive pricing.

Consumers can choose from more than two million apps, up from the 500 apps that were available when Apple created the App Store in 2008.

The company says the popularity of software for iPhones and its App Store should not obscure that consumers are buying apps from developers, not Apple.

"Apple is a sales and distribution agent for developers," Apple's lawyers said in a Supreme Court filing.

"Apple's core argument has always been that any injury to consumers necessarily depends on developer pass-through decisions, since Apple does not set apps prices."

Apple takes a 30 percent commission on the sale of apps, but it says any complaints about its pricing structure should come from developers, not consumers, since it's the developers who pay the commission.

The Trump administration is backing Apple at the high court.

Lawyers for consumers urged the High Court to allow the lawsuit to proceed. Consumers "pay monopoly prices for apps directly to Apple through its App Store," the lawyers wrote in their Supreme Court brief.

That direct relationship makes Apple the proper target of an antitrust lawsuit, they said.

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