Date
12 December 2018
Allowing a consumer class-action lawsuit to proceed will be dangerous for the e-commerce industry, Apple argues, as it resists a legal challenge in relation to its App store and app commission policies. Photo: Reuters
Allowing a consumer class-action lawsuit to proceed will be dangerous for the e-commerce industry, Apple argues, as it resists a legal challenge in relation to its App store and app commission policies. Photo: Reuters

US top court to hear Apple antitrust dispute

The US Supreme Court will on Monday hear arguments in an Apple bid to escape a lawsuit that accuses the firm of breaking antitrust laws in relation to its App Store and app commission policies.

Apple has been accused of monopolizing the market for iPhone apps and causing consumers to pay more than they should, given its commission policies on paid app sales, Reuters reports. 

Apple is appealing a lower court decision that revived the proposed consumer class-action lawsuit, arguing that the case should not be brought in the first place.

The tech giant argues that siding with the consumers who filed the lawsuit will threaten the burgeoning field of e-commerce. 

The plaintiffs, as well as antitrust watchdog groups, said that if the justices close courthouse doors to those who buy consumer products, monopolistic conduct could expand unchecked.

Consumers accused Apple of violating federal antitrust law by monopolizing the sale of paid apps, leading to inflated prices compared to if apps were available from other sources.

Though developers set the prices of their apps, Apple collects the payments from iPhone users, keeping a 30 percent commission on each purchase.

One area of dispute in the case is whether app developers recoup the cost of that commission by passing it on to consumers. 

Apple sought to have the antitrust claims dismissed, saying the plaintiffs lacked the required legal standing to bring the lawsuit.

Apple has seized upon a 1977 Supreme Court ruling that limited damages for anti-competitive conduct to those directly overcharged instead of indirect victims who paid an overcharge passed on by others, the report said.

Part of the concern, the court said in that case, was to free judges from having to make complex calculations of damages.

Apple said it is acting only as the agent for app developers who sell the apps to consumers through the App Store.

The company said allowing the lawsuit to proceed would be dangerous for the e-commerce industry, which increasingly relies on agent-based sales models. 

Lawsuits against companies like these would multiply “and lead to the quagmire this court sought to avoid,” Apple told the justices in a legal brief, according to Reuters.

Apple is supported by the Donald Trump administration. The plaintiffs are backed by the attorneys general of 30 states including California, Texas, Florida and New York, according to the report.

The US Chamber of Commerce business group, backing Apple, said in a brief to the justices, “The increased risk and cost of litigation will chill innovation, discourage commerce, and hurt developers, retailers and consumers alike.”

The plaintiffs and some anti-monopoly groups disagree. They said that app developers would be unlikely to sue because they would not want to bite the hand that feeds them, leaving no one to challenge anti-competitive conduct.

Developers “cannot risk the possibility of Apple removing them from the App Store if they bring suit,” Reuters quoted the American Antitrust Institute advocacy group as saying in a brief.

Apple is “trying to make it harder for injured parties to assert their rights under federal antitrust law,” said Mark Rifkin, an attorney for the plaintiffs.

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CG/RC

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