Supreme Court rules against Apple in lawsuit targeting App Store

Apple Shares Fall After Supreme Court Allows Consumer Lawsuit Over App Store

US Supreme Court Rules Against Apple, Allows Antitrust Suits

The case, Apple v. Pepper, alleges that Apple is raising prices for consumers with its mandatory 30% cut of any app sales consumers make. 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.

The decision also could let consumers sue Amazon by arguing that the fees it charges third-party sellers inflate the prices of products, said Hal Singer, an economist at Econ One Research Inc. and a senior fellow at the George Washington Institute of Public Policy. Court precedent says that indirect purchasers who are at least two steps removed in a distribution chain can not sue.

Apple had contended only app developers should be able to bring forward such litigation.

Apple argued that consumers couldn't sue the company because they aren't "direct purchasers" of apps. In an earlier hearing, Justices Stephen Breyer, Elena Kagan, and Sonia Sotomayor questioned Apple's reference to the Illinois Brick doctrine, relating to direct versus indirect purchasers.

"Apple's theory would provide a roadmap for monopolistic retailers to structure transactions with manufacturers or suppliers so as to evade antirust claims by consumers", Justice Brett Kavanaugh wrote in the opinion.

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We'll keep you updated as this story develops. But ordinary iPhone users-those who are unwilling or unable to jailbreak or use developer tools-have no way to install apps other than through the official App Store.

According to statistics portal Statista, US customers spent $46.6bn (£36bn) on a combination of in-app purchases, subscription and premium apps in 2018.

The ruling doesn't mean that the group will win any lawsuit against Apple, only that the group can sue Apple. "But if Apple does lose, one possible outcome is that Apple might be forced to allow consumers to install apps from outside the App Store".

"In the short term, we'll have to see if law firms look to create class action lawsuits against those platforms", said Morgan Reed, the organization's executive director. Instead of collecting payments for apps sold in the App Store and remitting the balance (less its commission) to developers, Apple can simply specify that consumers' payments will flow the other way: "directly to the developers, who will then remit commissions to Apple". Apple had warned that this could pose a threat to e-commerce, a rapidly expanding segment of the USA economy worth hundreds of billions of dollars in annual sales.

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