November 26, 2018

iPhone owners file antitrust suit against Apple


Recently, a group of iPhone owners filed an antitrust lawsuit against Apple, an American multinational technology company, stating that the company forces them to overpay for apps by forbidding rivals to the App Store, which is a digital distribution platform developed and maintained by Apple Inc. for mobile apps on its iOS operating system.

Moreover, another key issue in this case is that any software application that an iPhone owner buys from the App Store includes a 30% commission for Apple.

Notably, it has been reported that Apple will be moving the US Supreme Court on these issues. The court will hear arguments in Apple’s bid to escape damages in a lawsuit accusing it of breaking federal antitrust laws by monopolizing the market for iPhone apps and causing consumers to pay more than they should.

In 2017, the iPhone owners had won the right to launch a class action lawsuit against Apple. However, Apple is now appealing to the Supreme Court to have the decision overturned. Notably, in case Apple fails, the business model of the App Store could be threatened.

Reportedly, Apple earns billions every year by taking a 30pc cut of apps, created by developers, sold through the App Store.

According to the iPhone owners, Apple’s sizeable commission is evidence of the company exploiting its monopoly position over iPhone users.

They said, “iPhone consumers nationwide have paid [Apple] hundreds of millions of dollars more for iPhone apps than they would have paid in a competitive market”.

On the other hand, Apple responded that it does not set the prices of apps in the App Store; instead, it is the app developers who set the prices. Therefore, Apple concluded that iPhone users are purchasing the apps directly from the developers.

Nevertheless, the iPhone users countered that it is Apple which sets rules regarding the App Store, including the minimum price, and that it is effectively selling the apps on to users.

Apple is now seeking to dismiss the case by appealing to a 1977 Supreme Court ruling that only “direct purchasers” can seek damages for antitrust abuse.

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