Apple in a court battle over App Store

Apple in a court battle over App Store

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.

Apple is officially off to the Supreme Court today to fight an antitrust case that claims the App Store operates as a monopoly.

Apple said that siding with the iPhone users who filed the lawsuit would threaten the burgeoning field of e-commerce, which generates hundreds of billions of dollars annually in U.S. retail sales.

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. The class-action lawsuit in question accuses Apple of violating antitrust laws by monopolizing the market for iPhone apps and jacking up prices for those apps. Chief Justice John Roberts, a George W. Bush appointee, nevertheless suggested he sides with Apple and seemed concern that Apple could end up being held liable by both consumers and app developers. Apple says that the app developers are the ones who set the price of their apps; the plaintiffs counter that Apple is to blame because the company takes a 30% cut of an app's revenue.

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.

In 2014, the complaint against Apple was dismissed, but in early 2017, the Ninth Circuit Court of Appeals reversed that decision and Apple Inc. v. Pepper was back on.

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.

The company said allowing the lawsuit would be risky for the e-commerce industry, which increasingly relies on agent-based sales models. Apple cited companies like ticket site StubHub, Amazon's Marketplace and eBay.

"This is a closed loop", Justice Sonia Sotomayor told a lawyer for Apple.

Apple is supported by Apple fanboy President Donald (Prince of Orange) Trump's administration. The states are led by Texas Attorney General Ken Paxton, a Republican, and Iowa Attorney General Tom Miller, a Democrat.

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".

Gorsuch agreed, noting that only one group can claim they are paying the "monopoly rent" that results from Apple's pricing policies.

"Apple directed anticompetitive restraints at iPhone owners to prevent them from buying apps anywhere other than Apple's monopoly App Store", Frederick said. The nine justices appeared to be open to letting the lawsuit move up to the highest court in the US and it could bring huge changes to the App Store if Apple loses.

The suit, filed in federal court in Oakland, California, seeks class-action status and potentially hundreds of millions of dollars.

Going to the 9th Circuit Court of Appeals, Apple was classified as a distributor of apps that are sold directly to consumers, giving developers the right to bring suit against the company under antitrust laws.

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