An antitrust case filed against Apple which accuses the company of breaking antitrust laws by monopolizing the market for iPhone apps will be heard in the U.S. Supreme Court today. According to a report by Reuters, Apple collects the payments from iPhone users on it’s Apple app store, keeping a 30 percent commission on each purchase, leading to inflated prices compared to if apps were available from other sources. This results in customers having to pay more than they should.
The antitrust lawsuit dates to 2011 and alleges that Apple has created a monopoly by allowing apps to be sold only through its App Store and to charge excessive commissions.
Apple is appealing a lower-court decision saying that its practices are not monopolizing. It argues that they are only acting as an agent for developers who sell to consumers via the Apple App Store, not a distributor. If the supreme court favors customers it would “threaten the burgeoning field of e-commerce”, says Apple. In its defense, Apple has cited a 1977 Supreme Court ruling as part of its defense. Reuters reports:
Apple has seized upon a 1977 Supreme Court ruling that limited damages for anti-competitive conduct to those directly overcharged instead of indirect victims who paid an overcharge passed on by others. Part of the concern, the court said in that case, was to free judges from having to make complex calculations of damages.
Apple is backed by the attorneys general of 30 states including California, Texas, Florida and New York. The U.S. Chamber of Commerce business group who is also backing Apple, says “The increased risk and cost of litigation will chill innovation, discourage commerce, and hurt developers, retailers, and consumers alike.”
The nine justices of the U.S. Supreme Court will hear arguments in Apple’s bid to escape damages today. The justices will ultimately decide a broader question: Can consumers even sue for damages in an antitrust case like this one? writes Reuters.