May 13, 2019
A divided Supreme Court voted 5-4 on May 13 to allow an enormous antitrust class action suit against Apple to move forward—ruling that the plaintiffs should be allowed to try to prove that the Cupertino, California-based technology giant has monopolized the market for the sale of iPhone apps, The New York Times reported.
Justice Brett Kavanaugh, who joined the court in October, wrote the majority opinion in the case, Apple Inc. v. Pepper et. al (No. 17-204)., which also was signed by the court’s four more liberal justices—rejecting a plea from Apple to end the lawsuit. Justice Neil Gorsuch, who joined the court in 2017, wrote the dissent.
The syllabus of the case summarized the basis for the suit as follows:
Apple sells iPhone applications, or apps, directly to iPhone owners through its App Store—the only place where iPhone owners may lawfully buy apps. Most of those apps are created by independent developers under contracts with Apple. Apple charges the developers a $99 annual membership fee, allows them to set the retail price of the apps, and charges a 30% commission on every app sale. Respondents, four iPhone owners, sued Apple, alleging that the company has unlawfully monopolized the aftermarket for iPhone apps.
The legal question in the case was whether the suit was barred by a 1977 decision, Illinois Brick Co. V. Illinois, which allowed only direct purchasers of products to bring federal antitrust suits. According to the Times report, Apple argued that it was an intermediary and so not subject to suit.
The United States Court of Appeals for the Ninth Circuit, in San Francisco, earlier had disagreed. “Apple is a distributor of the iPhone apps, selling them directly to purchasers through its App Store,” Judge William A. Fletcher wrote for a unanimous three-judge panel of the court.
Research contact: @nytimes