US Supreme Court Rules Against Apple on App Store Antitrust Lawsuit

apple antitrust lawsuit thrown out supreme court

Today, the United States Supreme court ruled against Apple where they said iPhone users can pursue their antitrust lawsuit involving Apple’s App Store. This means that the Supreme Court will let the antitrust lawsuit against Apple proceed.

iPhone users argued that the ‘Apple tax’ (30% commission on sales) was an  unfair use of monopoly power which resulted in inflated prices that was passed on to consumers.

Apple on the other hand argued that app developers and not the users should be able to bring such a lawsuit and this was rejected by Justice Brett Kavanaugh. “Apple’s line-drawing does not make a lot of sense, other than as a way to gerrymander Apple out of this and other lawsuits,” Justice Kavanaugh wrote.

Apple had claimed that users were buying apps from developers and the developers were the Apple App Store customers. Their argument is based on a legal doctrine where ‘indirect purchasers’ of a product don’t have to file antitrust cases, but the United States Supreme Court determined that this logic does not apply to Apple.

This ruling against Apple could affect how companies with electronic marketplaces operate them. Google, Amazon and the likes have their own electronic marketplaces and they will be sure watching this case to see how it evolves. If Apple loses this case eventually, they would have to repay anyone who was ‘overcharged’ thanks to their App Store markup.

Thanks to this ruling, Apple’s stock took a hit and now it is 6% down which is a substantial drop.