Apple takes a 30 percent commission on the sale of apps, but it says any complaints about its pricing structure should come from developers, not consumers, since it's the developers who pay the commission.
Apple is supported by President Donald Trump's administration. Justice Sonia Sotomayor (an Obama appointee) noted how the customers could in fact show that they would have standing to sue under antitrust laws.
The plaintiffs argue that Apple's developers would be unable to sue Apple due to the firm controlling their means of revenue, which leaves the consumers as the only one who can challenge the firm in court. Currently, the App Store is the only official way to download apps for your iPhone or iPad. Developers earned more than $26 billion in 2017, a 30 percent increase over 2016, according to Apple.
Whether or not Apple has a monopoly over the App Store it invented is not the subject of the dispute. They describe the iPhone as akin to a shopping mall where consumers can freely shop for apps and buy what they choose. However, the plaintiffs are backed by the attorneys general of 30 states including California, Texas, Florida and NY.
Chief Justice John Roberts was the most supportive of Apple in his questioning.
The outcome in Apple v. Pepper is being closely watched - not only by developers who make apps for Apple but by online vendors who sell products on other platforms like Amazon.
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The iPhone users, including lead plaintiff Robert Pepper of Chicago, have argued that Apple's monopoly leads to inflated prices compared to if apps were available from other sources.
The lawsuit filed in 2011 was dismissed in 2014 because a lower court relied on a 1977 Supreme Court precedent that found a company or group of firms can only sued for price fixing by those who directly purchase its products.
Consumers 'pay the monopoly prices for apps directly to Apple through its App Store, ' the lawyers wrote in their Supreme Court brief.
Kavanaugh pointed to the words of the key antitrust law, which says "any person injured" may bring a claim.
Apple says it doesn't own the apps or sell them.
Apple has said it is acting only as the agent for app developers who sell the apps to consumers through the App Store. Developers set the prices, though Apple requires prices to end in.99, Wall said. A federal judge in Oakland, California threw out the suit, saying the consumers were not direct purchasers because the higher fees they paid were passed on to them by the developers.
The suit by iPhone users could force Apple to cut the 30 percent commission it charges software developers whose apps are sold through the App Store.