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Simplicity is supposed to be a selling point for the Apple iPhone Inc. This could be a problem for the US Supreme Court.
The court will hear arguments on Monday accusations that Apple will use its dominant position in the market to raise prices for iPhone applications. A decision against Apple, allowing legal action, could increase the pressure on the company to reduce the 30% commission levied on the sales of applications.
The case highlights what happens when iPhone users buy something on the Apple App Store. . In welcoming the complaint, a federal court of appeal said the transaction was simple and that consumers are buying directly from Apple. Apple says it's more complicated, the company serving as an intermediary linking application developers to users.
This distinction is essential because of a 1977 Supreme Court ruling that states that only direct purchasers of a product may collect damages under the federal antitrust law. . Part of this decision was to ensure that companies would not have to pay twice for the same fault.
Apple is part of an application-based economy that will grow from $ 82 billion last year to $ 157 billion by 2022, according to App Annie's forecast. .
Apple and its allies in the information technology sector believe that a decision allowing the prosecution of a consumer could open other companies operating online platforms and markets at costly antitrust claims. A broad decision could affect Google, Amazon.com, Alphabet Inc., Facebook Inc., Etsy Inc. and DoorDash Inc., Apple and its supporters. Apple earned Monday about 1.3% early in the session.
& # 39; DoorDash to Etsy & # 39;
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; Any dating service operating on the Internet from DoorDash to Etsy will be subject to duplicate damages, said Marianela Lopez-Galdos, Director of Competition Policy. and regulation at the Computer & Communications Industry Association, which supports the Apple case.
But Apple's critics say its control over the App Store differentiates it from other Internet markets. Apple decides which apps can be sold, gives developers a limited number of prices they can charge and tells users that the App Store is the only place they can get apps, says their lawyer.
When 39, a user buys an application, Apple collects the money, keeps the commission of 30% and gives the rest to the developer.The company told the High Court that it had paid 26.5 billion dollars to developers last year
. "Apple is integrated into the distribution chain, and this forces us to deal with Apple as nobody does."
Apple claims that the goal of the lawsuit is the commission of 30%, paid by the developers. , not the app buyers. Although consumers claim that they are paying commissions by charging higher prices for apps, Apple says these are the types of "pbad-through" damages prohibited by the 1977 Supreme Court decision in the US. Illinois Brick case v. Illinois Supreme Court.
Hundreds of Millions
"The full claim for damages is the first part directly harmed by a purported surplus," explained Apple in court documents. Dan Wall, the company's lead counsel, at the Supreme Court, declined to discuss the case before the debate.
The lawsuit, filed in a federal court in Oakland, California, seeks clbad action, or even hundreds of millions of dollars. 19659002] Apple's supporters include ACT / The App Association, a group of developers whose sponsors include Apple, Microsoft and eBay. The group said the appeal court's decision threatened to disrupt what was an innovation-friendly system for developers and platforms.
Association Associations' president, Morgan Reed, said the court of appeal had misinterpreted the relationship between developers and platforms, mistakenly considering platforms as distributors. buy from suppliers and resell them to customers, rather than just connecting the two.
This distinction "seems small" but constitutes "the core of a multi-billion dollar global industry," said Reed.
& # 39; Intangible Rights & # 39;
Thirty-one states support consumers, urging the Supreme Court to allow the lawsuit and to completely remove the direct purchase requirement by overturning the Illinois Brick ruling .
"The Illinois Brick regime is becoming increasingly difficult to apply in the modern world, with a growing business of intangible rights via new platforms," argue the Ued States. "This case is a good example."
Most states already allow downstream buyers to claim damages, and the group says the courts have been able to guarantee that companies do not have to pay twice. The states are headed by Texas Attorney General Ken Paxton, Republican, and by the Attorney General of Iowa, Tom Miller, Democrat.
Antitrust cases sometimes, but not always, divide the Supreme Court according to ideological criteria. In its most recent mandate, the court voted five to five to reject a lawsuit accusing American Express Co. of preventing competition from competing by banning merchants from selling cigarettes. Orient their clients to lower cost cards.
The court will rule in June at the latest. case, Apple c. Pepper, 17-204.
First published: Nov. 26, 2018 19:32 IST
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