News November 27, 2018

US Supreme Court green-lights lawsuit over Apple app sales

Staff Writer
US Supreme Court green-lights lawsuit over Apple app sales

The US Supreme Court has allowed an antitrust lawsuit by consumers who claim unfairly uses its market clout for unfair advantage.

The Cupertino, California-based giant has come under fire for forcing iPhone users to purchase software their smartphones exclusively through its App Store.

Apple imposes a 30% commission on tens of thousands of software developers whose apps are sold via the App Store.

It’s a lucrative source of income for Apple: in March 2018, it was estimated there are 2.1 million apps on the Apple App Store.

There were 500 when the app store was set up in 2008.

Apple’s legal argument is that it acts merely as a pipeline between app developers and consumers, that it neither owns nor sells the apps, which is the responsibility of software developers.

“Apple is a sales and distribution agent for developers,” it stated in court.

“Apple’s core argument has always been that any injury to consumers necessarily depends on developer pass-through decisions, since Apple does not set apps prices.”

Its attorney Daniel Wall further argued that consumers have no claim whatsoever.

Only developers could, he said, adding, “There have been plenty of disputes, but none has ever gone to litigation.”

The case, which expects a decision to be made by this time next year, will be a closely watched one.

The Supreme Court judges involved were divided on whether there has been a misuse of market power or if’s acceptable business.

Justice Elena Kagan, for example, said, “I pick up my iPhone. I go to Apple’s App Store. I pay Apple directly with credit card information that I’ve supplied to Apple.

“From my perspective, I’ve just engaged in a one-step transaction with Apple.”

However the judges argue, if consumers contend they have paid more than they should, the case should be heard.

If Apple wins, it would restrict future legal claims from consumers.

If it loses, it would have to drop the 30% commission and be liable for millions of dollars in compensation.

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