The United States Supreme Court today agreed to hear Apple’s challenge to a class action lawsuit brought by consumers who alleged the company has a monopoly on how apps can be purchased for its devices.
According to a new report from Reuters, the lawsuit accuses Apple of monopolizing the app market so it can charge excessive commissions of 30 percent. Apple says it cannot be sued because the commission is levied on the app developers, not the purchasers who are suing.
The Supreme Court has previously ruled that only “the overcharged direct purchaser, and not others in the chain of manufacture or distribution” have the right to bring antitrust cases. The class-action plaintiffs, in this case, argue that they’re the direct purchasers since they pay Apple directly for the apps, which then passes on their payments to the developers.
Apple has argued that it created a new competitive market, and it’s said before that its phones’ ecosystems are closed for security reasons since it can vet App Store apps for malicious code and other dangers. The Department of Justice has filed a supporting brief backing up the company.
“The case hinges on a 1977 U.S. Supreme Court decision that limited damages for anti-competitive conduct to those directly overcharged rather than indirect victims who paid an overcharge passed on by others,” reads the report. “But the San Francisco-based 9th U.S. Circuit Court of Appeals in 2017 revived the litigation, saying Apple was a distributor that sold iPhone apps directly to consumers and must face the antitrust claims.”
If Apple emerges from this lawsuit victorious, it could insulate companies that run online marketplaces and interact with consumers on behalf of third-party sellers.
If it loses the case, Apple might have to pay hundreds of millions of dollars in fines. Beyond that, the suit is taking aim at the whole concept of app store walled gardens — so other companies with similar marketplaces may also be watching for a verdict. Companies that could be affected include Google, Amazon, and Facebook, Apple told the Supreme Court in its appeal.