How much for this application? The highest US court hears a dispute over Apple's antitrust

WASHINGTON (Reuters) – When iPhone users want to change the darkness of their selfies, identify stars and constellations, or simply join the latest infatuation for video games, they turn to the App Store. Apple Inc, where any software application purchased also includes a 30% discount for Apple.

This commission is a key issue in a closely-monitored antitrust case that will be brought before the US Supreme Court on Monday. The nine judges will hear Apple's arguments to escape damages in a lawsuit accusing it of violating federal antitrust laws by monopolizing the iPhone app market and forcing consumers to pay more. that they should not.

Judges will finally decide a broader question: Can consumers even sue for damages in an antitrust case like this?

Apple, which appealed a lower court ruling that revived the proposed class action lawsuit by a consumer group, said no, citing a decades-old Supreme Court precedent. The Californian technology company in Cupertino, California, has said that lining up for iPhone users who have started the lawsuit would threaten the burgeoning field of e-commerce, which generates hundreds of billions of dollars each year in sales US retail.

The complainants, along with antitrust watchdog groups, have stated that if judges close the courthouse doors to those who buy consumer goods, monopolistic behavior could develop unchecked.

"Many technology platforms will begin to argue that consumers do not have standing to bring antitrust lawsuits against us," said Sandeep Vaheesan, legal director of the Open Markets Institute, an antitrust advocacy group. based in Washington.

"Uber could say, we only provide communication services to carpool drivers," said Vaheesan, referring to the famous carpool company. "In the event of an antitrust problem, drivers can make a claim, but the passengers do not have standing."

IPhone users have accused Apple of violating federal antitrust laws by monopolizing the sale of paid apps, which has resulted in higher prices than those offered by others. applications.

Although developers set prices for their apps, Apple collects payments from iPhone users, retaining a 30% commission on every purchase. One of the contentious points in this case is whether the application developers recover the cost of this commission by passing it on to consumers. Developers earned more than $ 26 billion in 2017, an increase of 30% over 2016, according to Apple.

The company requested the dismissal of its antitrust claims, claiming that the plaintiffs did not have the legal capacity to commence the lawsuit.

Apple seized a 1977 Supreme Court ruling that limited the damages for anti-competitive behavior to directly overburdened people instead of indirect victims who had paid a surcharge charged by others. The court said that in this case, part of the concern was to release the judges from the complex calculation of damages.

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

The company said letting the lawsuit out would be dangerous for the e-commerce sector, which is increasingly relying on agent-based sales models. Apple cited companies like the StubHub ticketing site, the Amazon market and eBay.

The lawsuits against such corporations would multiply "and create the quagmire that this court was trying to avoid," Apple told the judges in a legal brief.

E-commerce has reached $ 452 billion in US retail sales in 2017, according to US government estimates.

Apple is supported by the administration of President Donald Trump. The plaintiffs are supported by attorneys general from 30 states, including California, Texas, Florida and New York.

The American Chamber of Commerce's working group, supporting Apple, said in a memoir to the judges: "Increasing the risk and cost of litigation would inhibit innovation, discourage trade and hurt developers, retailers and consumers. consumers. "

Complainants and some anti-monopoly groups disagree. They said that it would be unlikely that application developers would sue because they would not want to bite the hand that feeds them, leaving no one to challenge anticompetitive behavior.

Developers "can not risk the possibility that Apple will remove them from the App Store if they file lawsuits," said the American Antitrust rights group. Institute in a statement.

Apple "is trying to make it more difficult for injured parties to assert their rights under federal antitrust law," said Mark Rifkin, plaintiffs' attorney.

The complaints against Apple date back to 2011 when several iPhone buyers, including leading plaintiff Robert Pepper of Chicago, filed a class action against Apple in federal court in Oakland, California. A judge first rejected the case, finding that the consumers were not direct buyers because the promoters had charged them higher fees.

Last year, the US-based 9th Circuit Court of Appeals in San Francisco relaunched the lawsuit, deciding that Apple was a distributor that sold iPhone apps directly to consumers.