Apple, Expensive iPhones One Day Content Rip Off Claims The Next
As Apple struggles to drum up sales for their expensive new iPhones the Company has been called out for their content and app practises with claims in a US court that they are actually breaking antitrust laws by monopolising the market for iPhone software applications and causing consumers to overpay.
US Supreme Court justices are tipped to let a lawsuit proceed against Apple that could if it goes against them cause major problems for Apples content ambitions.
The lawsuit said Apple violated federal antitrust laws by requiring apps to be sold through the company’s App Store and then taking a 30 percent commission from the purchases.
Nine US justices heard an hour of arguments in an appeal following a lower court’s decision to revive the proposed class-action lawsuit filed in federal court in California in 2011 by a group of iPhone users seeking monetary damages.
The iPhone users, including lead plaintiff Robert Pepper have argued that Apple’s monopoly leads to inflated prices compared to if apps were available from other sources.
Though developers set the prices of their apps, Apple collects the payments from iPhone users, keeping the 30 percent commission on each purchase.
One area of dispute in the case is whether app developers recoup the cost of that commission by passing it on to consumers. Developers earned more than $26 billion in 2017, a 30 percent increase over 2016, according to Apple.
The case may hinge on how the justices apply one of the court’s past decisions to the claims against Apple. That 1977 precedent limited damages for anti-competitive conduct to those directly overcharged rather than indirect victims who paid an overcharge passed on by others.
Yesterday Justices sharply questioned an attorney for Apple and Solicitor General Noel Francisco, who argued on behalf of the administration on the company’s side, over their argument that the consumers were not directly affected by purchasing the apps from Apple.
Liberal Justice Elena Kagan, explaining how an App Store purchase is handled, said, “From my perspective, I’ve just engaged in a one-step transaction with Apple.”
Some conservative justices, including Trump appointee Neil Gorsuch, wondered whether the 1977 ruling was still valid in a modern marketplace.
Conservative Chief Justice John Roberts’ questions suggested he agreed with Apple’s position. Roberts expressed concern that, for a single price increase, Apple could be held liable by both consumers and app developers.