Supreme Court rules against Apple in lawsuit targeting App Store

Apple logo inside of an Apple store at Grand Central Station in New York

Apple logo inside of an Apple store at Grand Central Station in New York

The consumer plaintiffs claim Apple monopolized the market in violation of federal antitrust law by requiring that apps be sold through its App Store and extracting an excessive 30 percent commission on purchases.

Apple shares were down more than 5% Monday morning following the verdict.

Apple cancels plans for its AirPower charging mat because it reportedly didn't meet the company's standards; Walgreens will reportedly test tobacco-free stores in the USA but doesn't plan to quit selling cigarettes entirely.

A group of iPhone owners accusing Apple of violating U.S. antitrust rules because of its App Store monopoly can sue the company, the Supreme Court ruled Monday. Instead of collecting payments for apps sold in the App Store and remitting the balance (less its commission) to developers, Apple can simply specify that consumers' payments will flow the other way: "directly to the developers, who will then remit commissions to Apple".

The Supreme Court did not rule on the customers' likelihood of success - only that they have the right to sue. In that case, the court limited damages for anti-competitive conduct to those directly overcharged rather than indirect victims who paid an overcharge passed on by others.

Kavanaugh's stance with the liberal wing of the court was striking. "We disagree. The plaintiffs purchased apps directly from Apple and therefore are direct purchasers".

In a 5-4 ruling, a Ninth Circuit decision was upheld which stated that iPhone owners were direct purchasers as they purchased apps directly from Apple's app store.

Trump appointee, Justice Brett M. Kavanaugh, wrote the majority opinion in Apple v. Pepper, No. 17-204.

Kavanaugh was joined by liberal justices Ruth Ginsburg, Elena Kagan, Stephen Breyer and Sonia Sotomayor.

The dispute with China, which was the subject of numerous weekend tweets by President Trump, has sent broader markets well into the red.

And Apple faces charges in Europe of abusing its platform by discriminating against rival apps, including one complaint from streaming music service Spotify.

Ann Thai, senior product marketing manager of the App Store at Apple Inc., speaks during a company product launch event on March 25, 2019 in Cupertino. But it does open the door for both consumers and app developers to sue the company over its alleged monopolistic iOS practices.

Apple charges a 30 per cent commission on app sales, and while it allows developers to set their own price, requires that price end in.99 cents. It argued the ruling could pose a threat to the e-commerce sector.

The suit, which was first filed in 2011, was supported by 30 state attorneys general, including from Texas, California and NY.