UPDATED 21:59 EST / JUNE 18 2018

APPS

Apple obtains approval for hearing to block App Store antitrust case

The U.S. Supreme Court has agreed to hear arguments from Apple Inc., which aims to block an antitrust case that alleges the iPhone maker operates an illegal monopoly with its App Store.

The case, a class action lawsuit dating back to 2011, alleges that Apple runs an illegal monopoly by not allowing iPhone users to download mobile apps outside of its own App Store, reducing consumer choice. The initial lawsuit was dismissed in 2013 because of errors in the complaint, according to Macrumors, before being refiled and given the green light to proceed by the U.S. Court of Appeals for the Ninth Circuit in 2017.

Apple has not had the case dismissed by the Supreme Court but has obtained the green light for an appeal, technically a “writ of certiorari,” wherein the Supreme Court will review the Court of Appeals decision to allow the lawsuit to proceed.

Should Apple fail to overturn the Court of Appeals decision, the lawsuit will proceed. Should the lawsuit eventually be successful the implications could be widespread within e-commerce.

At the heart of the lawsuit, in addition to excluding access to third-party sites, is that Apple charges developers a $99 annual fee to register their apps with the App store. That’s in addition to a 30 percent commission on every app sale, which plaintiffs charge artificially increases the cost of apps.

Reuters noted that case could expand the threat of antitrust damages against companies in the rapidly growing field of electronic commerce, which generates hundreds of billions of dollars annually in U.S. retail sales.

Apple is arguing that because developers, not Apple, set the price of apps and sell them, the litigants have no standing. To prove that Apple is engaging in antitrust activity, the litigants must prove that Apple sells the apps on behalf of developers, it has argued.

The Court of Appeal ruling in the 2017 found that Apple was a distributor that sold iPhone apps directly to consumers and therefore must face the antitrust claims.

Photo: glenbledsoe/Flickr

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