The US Supreme Court on Monday ruled against Apple in a case that could have broad implications for the e-commerce industry and which also means the door is now open for consumers to sue the iPhone maker over its App Store rules and practices.
In a 5-4 ruling, with Donald Trump appointee Brett Kavanaugh siding with the court’s four liberal justices, the decision essentially clears the way for a class action lawsuit against Apple to proceed. That suit will focus on Apple’s rules that developers must sell their apps through its app marketplace, in addition to paying a 30 percent commission to Apple.
For a bit of background here, the 9th U.S. Circuit Court of Appeals ruled in January 2017 that Apple sells its apps directly to consumers and that they can move forward with an antitrust suit on these grounds. That’s even though Apple — which the Trump administration sided with — tried to claim it doesn’t actually sell apps directly to consumers. That what it does, instead, is offer the equivalent of digital shelf space and that developers are the ones selling apps to consumers, subject to rules and terms set by Apple.
Indeed, another Trump appointee — Justice Neil Gorsuch — wrote in the dissenting opinion about this ruling that app developers have more legitimate standing to contend with Apple, not consumers.
“If, as plaintiffs contend, Apple’s 30% commission is a monopolistic overcharge, then the app developers have a claim against Apple to recover whatever portion of the commission they did not pass on to consumers,” he wrote.
This is an antitrust case, in the sense that the plaintiffs want the chance to prove in court that Apple’s App Store is effectively a monopoly. That the company is “monopolizing” the sale of apps and games in its store and that the store’s rules are artificially inflating prices for those apps.
During oral arguments in this case in the fall, Justice Elena Kagan said it seemed clear that consumers have a direct relationship with Apple here — and thus, as such, should be able to sue the company.
“It just seems to me that when you’re looking at the relationship between the consumer and Apple, that there is only one step,” Kagan said, seemingly referring to the simple tap being all that’s required to buy apps.
