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The US Supreme Court on Monday sentenced Apple Inc. to a major setback in a lawsuit filed against the App Store eight years ago, but the big news is the huge effect this could have. have on Big Tech.
The Supreme Court said Monday that plaintiffs have the right to sue Apple in court
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in a class action that alleges monopolistic behavior in the App Store has resulted in overcharging. While the end result for Apple is uncertain at the moment, the decision seems to be positive for consumers buying services on platforms owned by Apple and other technology companies because it gives them the opportunity to sue for alleged monopoly pricing practices.
The case was filed in 2011 by four iPhone users who alleged that Apple had illegally monopolized "the secondary market for iPhone applications" and that Apple had forced users to "buy" the iPhone. 39, iPhone to buy applications only from Apple and pay the fee of 30% of the latter, even if buy them elsewhere.
In its ruling on Monday, the tribunal concluded: "The plaintiffs are seeking to hold retailers to account if they engage in illegal anti-competitive behavior that harms consumers who buy from these retailers. That's why we have an antitrust law. "
The fact that Apple was considered a retailer is important for the way in which the courts treat these types of technology platforms in the future. In its arguments before the Supreme Court, Apple said the developers were fixing the price of their applications and that a case involving a precedent involving Illinois Brick Co. only allowed direct buyers to sue the party who set the price sale to detail. The judges, however, reviewed the excuses "We're right here to make things easier" common to Silicon Valley companies who prefer to avoid guilt or responsibility while taking huge cuts and exercising complete control over their platforms.
"The App Store is considered a platform market," said Donald Polden, law professor and director of the Center for Global Law and Policy at the University of Santa Clara, who said his He and his students had studied the case in one of his classes. "Amazon
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, TicketMaster, they run platform markets. We have a number of technology industries that operate on platforms. "
Polden said the decision opens the door to lawsuits against similar platforms by consumers, specifically citing lawsuits against Live Nation Entertainment Inc.
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TicketMaster.
"It's a big win for consumers," said Polden. "These arguments that" we are not the monopolist "," we do not fix the prices ", somehow shattered with the decision taken this morning."
"The Supreme Court reaffirmed the simple principle that consumers who buy a monopolized product directly from the alleged monopolist can sue the monopolist for the full amount of the surcharge they are forced to pay because of the monopoly, "said lead prosecutor Mark Rifkin. The plaintiffs and a partner of Wolf Haldenstein in New York, said in an email.
For Apple, any financial ramification could be done in years. The ruling refers the case to the lower courts that had initially sided with the iPhone maker. Therefore, the people who followed the case stated that it would probably remain for a few years before the problem is solved.
"Today's decision means that plaintiffs can sue in a district court. We are confident that we will prevail when the facts are presented and that the App Store does not constitute a monopoly of any extent, "said a spokesman for Apple in a statement.
He also said that the vast majority of apps in the App Store are free and that Apple derives no profit. "The only case where Apple shares its revenue is if the developer chooses to sell digital services through the App Store," Apple said.
In the end, this decision could have a negative impact on the important and growing Apple service business, which was the favorite topic of discussion of general manager Tim Cook, while the sales of the iPhone were stagnant, which is anchored by the 30% reduction in fees charged by the App Store. for purchases and app subscriptions. Apple's enforcement practices have already angered companies that sell through the App Store, including Netflix Inc.
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and Spotify Inc.
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, the latter is officially complained that the reduction that Apple takes after consumers have made an in-app purchase makes it difficult for companies to compete with Apple.
See also: Netflix is the latest company to bypass the Apple App Store.
Polden believes that the case will result in a final settlement, in order to avoid a lawsuit. "I think it will take 4 to 5 years before the case is settled," he said.
Dan Ives, an analyst at Wedbush Securities, does not believe that Apple will settle but that the case will result in a possible ruling against Apple up to several hundred million dollars.
"The biggest concern is the word M (monopoly) used and what this decision could do to change the structure of the App Store in the future and thus potentially put pressure on the cake's share. Apple on this revenue stream of $ 15 billion, "said Ives in a statement. E-mail. "This is the biggest concern of investors on this front."
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