App Store ‘Monopoly’ Case Goes To Supreme Court

The Supreme Court will rule in a seven year battle over claims the iOS App Store is an illegal monopoly.

The case was originally based on two facts: that iOS users can’t (officially) download apps from any other source, and that Apple takes a cut of the app revenues. The plaintiffs say the former point shows a monopoly, while the latter means that the monopoly harms consumers because the need to provide Apple’s cut means prices are inflated.

It’s a slightly odd case as there’s not actually a lower court verdict for the Supreme Court to debate. The original claim was dismissed in a district court on procedural grounds rather than on the merits or otherwise of the claim. The plaintiffs then went to an appeals court, which agreed the claim should be heard after all.

Apple then went straight to asking for a hearing at the Supreme Court, despite there being no disagreement or conflict between lower court verdicts. That’s been granted and the hearing begins this week.

As is usually the case with the Supreme Court, the justices aren’t so much looking at the facts of the specific claim but rather settling a wider legal point. In this case it’s all about a precedent from a 1977 case that Apple says means it is automatically exempt from the antitrust claims regardless of whether a monopoly exists.

That 1977 case says plaintiffs can’t sue a company over antitrust violations unless they buy the relevant products or services directly from that company. Apple argues that iOS users are buying from the app developers themselves and likens the App Store to a shopping mall. It also notes that (even with Apple’s 30 percent cut), it’s the developers who set the price.

The plaintiffs say that’s not a fair analogy because it’s not the actual apps that are monopolized, but rather the distribution method.

It appears the main question for the Supreme Court to answer is whether the extra step in this relationship (Apple ‘monopolizes’ the distribution by developers > developers charge more to customers) is enough to shield Apple from antitrust claims by customers.

It’s important to note that if the Supreme Court finds against Apple, it doesn’t mean the original claim itself automatically succeeds: the plaintiffs would simply win the opportunity to make that case in court.

[Via: Wired]