The Supreme Court on Monday ruled 5-4 against Apple, stating that iPhone users can now pursue their antitrust lawsuit involving the tech giant’s signature electronic marketplace, the App Store.
Justice Brett Kavanaugh, who wrote the majority opinion, was joined by the court’s liberal justices.
The iPhone users argued that Apple’s 30 percent commission on sales through the App Store is an unfair use of monopoly power that results in inflated prices passed on to consumers.
For its part, Apple argued that only app developers, not users should be able to bring such a lawsuit. The Supreme Court, via the opinion authored by Kavanaugh, rejected the claim
“Apple’s line-drawing does not make a lot of sense, other than as a way to gerrymander Apple out of this and similar lawsuits,” Kavanaugh wrote.
Shares of Apple, already battered by trade concerns, were down 8 percent in after hours trading, lagging the broader market.
The result was widely expected after arguments in November in the case, Apple v. Pepper, during which the justices seemed skeptical of Apple’s arguments.
The legal battle over the company’s online marketplace has dragged on for nearly a decade.
The result of the Supreme Court’s decision could affect the way that Apple, as well as other companies, such as Facebook, Amazon, and Google, could structure their online marketplaces. Apple, in turn, could face hundreds of millions of dollars in penalties resulting from the outcome.
In a statement, David Frederick, an attorney for the iPhone users, said the “decision is important for upholding consumer protections against the dangers of monopoly retailers like Apple. Apple’s monopoly control has distorted the prices for apps and it’s time for that abuse of monopoly power to end.”
Apple offered the following statement:
“Today’s decision means plaintiffs can proceed with their case in District court. We’re confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric.
We’re proud to have created the safest, most secure and trusted platform for customers and a great business opportunity for all developers around the world. Developers set the price they want to charge for their app and Apple has no role in that. The vast majority of apps on the App Store are free and Apple gets nothing from them. The only instance where Apple shares in revenue is if the developer chooses to sell digital services through the App Store.
Developers have a number of platforms to choose from to deliver their software — from other apps stores, to Smart TVs to gaming consoles — and we work hard every day to make our store the best, safest and most competitive in the world. ”
Stay tuned for additional details as they become available.