The Supreme Court ruled 5-4 that iPhone and iPad owners directly purchase the apps from Apple, thus allowing them to sue Apple. Specifically, it allows for suits from iPhone owners who believe that Apple's 30% sales commissions could be driving up app prices, especially as there is no other lawful way to get apps on iOS. The suit charges Apple with gouging consumers through what it describes as a monopoly on apps in the App Store. Consumers have been harmed by the practice, the suit claimed, because Apple does not allow customers to download apps from any other source other than the iTunes App Store.
At the heart of the case is Apple's handling of iPhone and iPad apps created by third-party developers and made available on its heavily curated App Store.
Kavanaugh was joined by liberal justices Ruth Ginsburg, Elena Kagan, Stephen Breyer and Sonia Sotomayor.
"Apple's theory would provide a roadmap for monopolistic retailers to structure transactions with manufacturers or suppliers so as to evade antitrust claims by consumers and thereby thwart effective antitrust enforcement", Kavanaugh wrote in the ruling. Following the ruling, Apple shares dropped by five percent - the stock was already under pressure due to the tariff dispute between the USA and China.
This verdict is not going to have an immediate major impact on Apple.
Gorsuch's dissenting minority opinion cited the landmark Illinois Brick Co. v. Illinois case of 1977 to say that "an antitrust plaintiff can't sue a defendant for overcharging someone else who might (or might not) have passed on all (or some) of the overcharge to him".
Apple's stock opened Monday at its lowest point in six weeks due to the escalating U.S.
We have reached out to Apple for comment and will update this story with any response. Trump appointee Justice Neil Gorsuch wrote the dissent.
Instead, it believes developers are the only "direct purchasers" who have the right to sue. They claim prices are consequently high stemming from the charges Apple imposes on app developers. It is important to understand that the Supreme Court has not ruled that Apple violated antitrust laws.
The case is Apple Inc. v Pepper, 17-204.