Supreme Court Rules Apple Anti-Trust Lawsuits May Move Forward

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The U.S. Supreme Court ruled 5-4 against Apple to allow customers to sue the company for allegedly driving up prices with monopolistic practices.

The Court upheld the Ninth Circuit Court of Appeals' decision in Apple v. Pepper, suggesting that App Store customers are buying directly from Apple, and that Apple isn't just a go-between for customers and developers. Specifically, it allows for suits from iPhone owners who believe that Apple's 30% sales commissions could be driving up app prices, especially as there is no other lawful way to get apps on iOS.

"Apple’s line-drawing does not make a lot of sense, other than as a way to gerrymander Apple out of this and similar lawsuits," Justice Brett Kavanaugh wrote in the majority opinion. The arguments in full can be found here.

"Today’s decision means plaintiffs can proceed with their case in District court. We’re confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric," Apple said in a statement to CNBC. 

Apple's store is far from the only one that takes a cut from developers. Valve Corporation takes a similar 30 percent cut from game sales on its Steam platform, though it offers further incentives for higher sales. Google, too, takes a 30 percent cut from its Play Store. But in both cases - PC games and Android apps - there are alternatives for getting the products on the platform, so it's unclear how this could affect other companies with online stores.

The Court did not, however, rule that Apple's App Store is a monopoly. It only ruled that lawsuits may go forward.

"The sole question presented at this early stage of the case is whether these consumers are proper plaintiffs for this kind of antitrust suit," the majority opinion reads.

As of this writing, Apple's stock is down 4.9% percent on the news.

Update May 13, 3:18 p.m: Added statement from Apple.

8 comments
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  • jimmysmitty
    Neither Google or Valve force you to use or buy directly from them. Developers are free to use other means of distribution, hell even Samsung has their own app store that some of their apps push from and you have GMG and HumbleBundle. Thats the major difference between them. Apple forces everyone to go through the App Store and through them only.

    Honestly I am not sure why anyone would even be surprised by this at all. Apple has always controlled its ecosystem. From MacOS to iOS, they have always held a tight grip over everything. Hell you can barely upgrade RAM in an Apple system.

    I am sure they will fight to the death over this but if by some chance they lose it will be interesting to see what happens. Without the control over how and what apps get published for iOS it could cause them a lot of potential headaches and loss of revenue.
  • redgarl
    It is sooo ironic... isn't Apple saying the same thing about QCOM not even 2 months ago?
  • Gurg
    I've have 10 purchased titles on Steam/Valve that I've played for over 10,000 hours. Steam tracks my purchased titles, notifies and manages my updates and available enhancements some of which are free and some for purchase, and I've downloaded these titles over a hundred times as I've moved to different drives and computers. So if they have made a couple of hundred bucks over the last decade plus it certainly feel like I've received reasonable value. When I click on my Steam icon, the last game I played comes up and not a bunch of bloat ads that slow down my computer.

    In contrast are the two overpriced Apple phones I own which are quirky, a royal pain, bloated with ads and frequently freeze requiring a power off/restart.