Leading US court looks into antitrust lawsuit on Apple App Store

WASHINGTON (Reuters) – US Supreme Court judges have been open to a lawsuit against Apple Inc. ( AAPL.O ), accusing the US of have violated federal antitrust laws by monopolizing the iPhone software market. applications and cause consumers to overpay.

The nine judges heard an hour of Arguments in the context of an appeal by Cupertino, California-based technology company based on the lower court's decision to revive the proposed clbad action brought in federal court in California in 2011 by a group of iPhone users seeking damages

The complaint indicated that Apple had violated federal antitrust laws by requiring that applications be sold through the company's App Store and then charging a 30% commission on purchases.

The case may depend on how judges apply one of the court's previous decisions to claims against Apple. This 1977 precedent limited the damage for anti-competitive conduct to those directly overloaded rather than to the indirect victims who paid a surcharge charged by others.

Apple is supported by the administration of Republican President Donald Trump. Some liberal and conservative judges questioned Apple's attorney and US Attorney General Noel Francisco, who had pleaded on behalf of the company's administration, claiming that consumers were not directly concerned with the purchase of applications from Apple.

The liberal judge Elena Kagan, explaining the management of a purchase on an App Store, said: "From my point of view, I have just engaged in a one-step deal with Apple. "

Some conservative judges, including Neil, appointed by Trump, Gorsuch asked if the 1977 decision was still valid in a modern market.

Questions from Conservative Chief Justice John Roberts suggest that Apple endorses Apple's position that Roberts is concerned that for a single price increase, Apple may be held accountable to consumers and application developers.

iPhone users, including plaintiff, Robert Pepper, of Chicago, argued that Apple's monopoly resulted in price inflation compared to that of applications available from other sources.

Although developers set prices for their applications, Apple's collection l Payments from iPhone users, keeping the commission of 30% on every purchase. One of the contentious points in this case is whether the application developers recover the cost of this commission by pbading it on to consumers. Developers earned more than $ 26 billion in 2017, an increase of 30% over 2016, according to Apple.

Apple spokeswoman, Rachel Wolf Tulley, said in a statement that the arguments that the App Store had fueled competition and encouraged innovation in software development, have created millions of jobs in the sector.

"We hope that the Supreme Court will recognize the crucial role played by Apple as a market for applications, and maintain the existing legal precedent in favor of Apple and the millions of developers who sell their applications on our platform, "said Tulley.

CLOSING DOORS OF THE COURT OF JUSTICE

Apple, also backed by the US Chamber of Commerce business group, argued that a decision that would go hand in hand with the users of IPhone, which initiated the lawsuit, would threaten the burgeoning field of e-commerce, which generates hundreds of billions of dollars a year in US retail sales.

The plaintiffs, as well as antitrust watchdog groups, have stated that closing courthouse doors to those who purchase finished goods would undermine the enforcement of antitrust laws and allow monopoly behavior to develop unchecked. control. The plaintiffs were supported by 30 state attorneys general, including Texas, California and New York.

The plaintiffs stated that application developers would have little chance of suing Apple, which controls the service where they make money, leaving no one to challenge anticompetitive behavior.

Alongside Gorsuch, conservative Judge Samuel Alito emphasized the unwillingness of app developers to sue Apple by challenging the previous one of 1977.

Judge Brett Kavanaugh, another conservative representative from Trump, rejected Francisco's argument that Apple's shares are not the direct cause of higher prices for consumers, as manufacturers set final prices.

Kavanaugh later suggested that plaintiffs would have a stronger right to sue if Apple bought the apps from developers and sold them to consumers with a 30% commission. .

Apple said that it acted only as an agent for application developers who sell apps to consumers via the App Store.

Liberal judges Sonia Sotomayor and Stephen Breyer seemed convinced that the claims of iPhone buyers should be accepted.

"They claim that their injury is a cheaper price suppression," said Apple's lawyer, Daniel Wall, Sotomayor.

The company sought to have the antitrust claims dismissed, arguing that the plaintiffs did not have the legal capacity to bring suit. A federal judge in Oakland dismissed the complaint, stating that consumers were not direct buyers because the developers had charged them higher fees.

The 9th US Federal Court of Appeal, based in San Francisco, relaunched the case last year, concluding that Apple was a distributor that was selling iPhone apps directly to consumers.