Is Apple monopolistic in the way it distributes downloadable applications through its App Store? In the way it takes a 30 percent cut out of fees for paid apps, passing the rest on to developers, and limiting those developers to the company’s official store for apps?
Those questions will be part of a case the U.S. Supreme Court agreed to hear on Monday. The high court said it would focus on a narrow slice of the issue — on Apple’s claim that app developers are the ones who have standing here to bring an antitrust suit.
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. Apple contends it doesn’t sell the apps directly – that it offers instead the equivalent of digital shelf space and that developers are the ones selling apps to consumers, subject to rules and terms set by Apple.
The consumer argument here – which stems from a now 7-year-old federal lawsuit filed in California — is that Apple’s App Store is effectively a monopoly. That the Cupertino tech giant is “monopolizing” the sale of apps and games and the like in its store and that its rules are artificially inflating prices for those apps, compared to if Apple let developers make them more freely available to Apple customers.
Question: if that’s the route you really want Apple to go, can’t you just swap your iOS device for an Android phone and then take a happy, satisfied breath and be done with it? Bueller?
Worth noting is that other similar marketplaces like Amazon’s app marketplace and sites like StubHub could be affected, depending on which way this ruling goes. The stakes here are also certainly high, given that e-commerce sales hit $452 billion in the U.S. last year, according to U.S. government estimates cited by Reuters.