Apple grilled on App Store pricing

Supreme Court

On Monday, the court heard oral arguments in a long-standing legal battle that could shake up Apple's strict control over the iOS ecosystem.

In a lawsuit brought in 2011, a group of iPhone users allege that Apple's 30% commission from developers gets passed on to consumers. But the suit said Apple collected the payments from iPhone users, keeping a 30 percent commission on each transaction. He said he's concerned that if the ruling went against Apple, the company would be liable by both consumers and app developers for a single price increase. Hovenkamp says that this case is different than typical antitrust cases.

Apple has denied it engaged in anti-competitive behaviour, saying the prices for apps were set by app developers.

Apple and its tech-industry allies say a decision allowing the consumer lawsuit could open other companies that run online marketplaces and platforms to expensive antitrust claims. The plaintiffs, as well as antitrust watchdog groups, said a decision for Apple would undermine antitrust enforcement and allow monopolistic behaviour to expand unchecked.

"They happen to be the largest company in the world, or at least they were some weeks ago, and they are able to extract monopoly pricing by virtue of a unique e-commerce monopoly on their App Store", said Frederick. The company's antitrust violation, he said, was the App Store itself. I pay Apple directly with the credit card information that I've supplied to Apple.

The arguments dealt with the fruits of technology that, over the past 10 years, have made more than 2 million apps available to iPhone users, but in the courtroom there were also references to older antitrust cases involving concrete, aluminum, natural gas and shoes.

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Several justices appeared skeptical of Apple's argument.

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 is supported by President Donald Trump's administration. Developers must submit their apps to Apple for approval, and if they meet all of the company's criteria (and are malware-free), they can be listed either as a free, freemium, or paid app.

However last year the San Francisco 9th US Circuit Court of Appeals last year revived the lawsuit, deciding that Apple was a distributor that sold iPhone apps directly to consumers.

In 2013, U.S. District Court Judge Yvonne Gonzalez Rogers in the Northern District of California dismissed the lawsuit.

Kavanaugh later suggested that the plaintiffs would have a more clear-cut right to sue if Apple bought the apps from the developers and sold them to consumers with its 30 percent commission.

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