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Supreme Court rules against Apple, allowing lawsuit targeting App Store to proceed

13 May 2019

The Supreme Court ruled against Apple on Monday in an antitrust lawsuit that accused the tech company of monopolizing IOS apps and artificially inflating prices through its App Store.

iPhone users who must purchase software for their smartphones exclusively through Apple's App Store filed the suit.

Apple's App Store marketplace has always been a target of some consumers and developers because the company takes a commission of up to 30% on sales, the so-called "Apple Tax". This commission structure results in higher prices for consumers, the plaintiffs argued.

Apple's response was a legal classic: It claimed that the iPhone users could not sue it because they weren't purchasing Apple products directly from Apple. The App Store is the only way to legally purchase iPhone apps, but Apple charges developers an annual $99 fee to operate on the digital marketplace. "We merely hold that the Illinois Brick direct-purchaser rule does not bar these plaintiffs from suing Apple under the antitrust laws".

The opinion, authored by Justice Brett Kavanaugh, declined to take a specific stance regarding Apple's business practices.

Dissenting from the decision, conservative Justice Neil Gorsuch, said the decision is "not how antitrust law is supposed to work" because it gives a green light to the exact type of case that the court had previously prohibited.

Dailymail.com has reached out to Apple for comment on the court's decision. Following the ruling, Apple shares dropped by five percent - the stock was already under pressure due to the tariff dispute between the USA and China.

Apple's iOS 13 mobile operating system may not support older iPhone models such as the iPhone 5s, iPhone SE, iPhone 6, and the iPhone 6 Plus.

The Supreme Court further added that "this is not a case where multiple parties at different levels of a distribution chain are trying to recover the same passed-through overcharge initially levied by the manufacturer at the top of the chain". "In other words, Apple as retailer pockets a 30% commission on every app sale", said Kavanaugh, one of President Donald Trump's two high court appointees.

The ruling may require Apple to pay hundreds of millions of dollars to developers and make changes to its App store, the Verge previously reported.

Supreme Court rules against Apple, allowing lawsuit targeting App Store to proceed