The Supreme Court ruled Monday that iPhone users can bring an antitrust lawsuit against Apple alleging the tech giant has monopolized the market for software applications.
Justice Brett Kavanaugh delivered the 5-4 decision, joined by the high court’s liberal bloc. Justice Neil Gorsuch led the conservatives in dissent.
“The plaintiffs seek to hold retailers to account if the retailers engage in unlawful anticompetitive conduct that harms consumers who purchase from those retailers,” Kavanaugh wrote. “That is why we have antitrust law.”
The app market is essentially a closed system for consumers. Apple iPhones are programmed so they cannot download apps outside the Apple-administered App Store, and users who modify their devices to download apps from other sources — called jailbreaking — risk adverse consequences like voiding their warranty. What’s more, Apple may remove apps from its store for any reason whatever, and requires that all prices are set on a .99 scale, like $1.99 and $2.99.
When an application is purchased, Apple collects a 30 percent commission and gives the other 70 percent to the developer.
Taken together, the plaintiffs say this constitutes an unlawful monopoly: consumers are forced to purchase apps in a digital storefront Apple controls, and end up paying higher prices because developers price in the 30 percent commission Apple collects, effectively passing the burden on to consumers.
This is breaking news. This post will be updated.
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