November 29, 2018

*-- Are Apple apps too expensive? Supreme Court considers antitrust argument --*

The U.S. Supreme Court will hear arguments Monday on whether the Apple App Store has a monopoly and whether consumers can sue for antitrust damages.

At issue is whether Apple's cut of the revenue for app purchases makes the tech giant liable or whether it's a pass-through charge. Apple cites a precedent set in a 1977 case in which downstream companies are not responsible.

"Electronic marketplaces such as Apple's App Store present a new wrinkle on this doctrine because the marketplace sponsor (e.g. Apple) interacts with and delivers goods 'directly' to consumers, but as an agent on behalf of third-party sellers," court documents read.

The lawsuit was filed by Chicagoan Robert Pepper in 2011 saying Apple's monopoly leads to inflated prices because there's no competition. Apple collects a 30 percent commission on every sale. The app developers could overcharge for the apps to make up for Apple's 30 percent cut.

Plaintiffs argue that they "have been injured by Apple's anti-competitive conduct because they paid more for their iPhone apps than they would have paid" in a more competitive market where there were other places to buy apps, court documents state.

"Apple does not take ownership of third-party apps sold through the App Store, but instead acts as the developers' agent and completes the sales on their behalf," court documents state.

The case has bounced around the lower courts for several years.
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