Supreme Court Takes Up App Store Monopoly Case

WASHINGTON (CN) – The U.S. Supreme Court took up a case Monday where consumers say Apple monopolizes the market for iPhone apps.

Robert Pepper and others initiated the suit in 2011, accusing Apple of violating antitrust law by increasing the prices for the apps, prohibiting third-party developers from selling their apps elsewhere and threatening to void the warranties of iPhone users who download unapproved apps.

Apple earns 30 percent commission on App Store sales.

The original complaint also claimed that Apple was engaged in a conspiracy with AT&T Mobility to make the cellular provider “the exclusive provider of cellphone voice and data services for iPhone customers.” That claim was not at issue on appeal.

Though a federal judge dismissed the case in 2013, the Ninth Circuit reversed in a unanimous 3-0 vote last year.

The ruling hinged on the finding that Apple is a distributor of the iPhone apps, giving consumers standing to challenge the alleged monopoly in court.

Questions of whether purchasing an app is a direct transaction and who sets the price are immaterial, the panel held.

“Apple analogizes its role to the role of an owner of a shopping mall that ‘leases physical space to various stores,’” U.S. Circuit Judge William Fletcher wrote for the court. “In the case before us, third-party developers of iPhone apps do not have their own ‘stores.’ Indeed, part of the anticompetitive behavior alleged by plaintiffs is that, far from allowing iPhone app developers to sell through their own ‘stores,’ Apple specifically forbids them to do so, instead requiring them to sell iPhone apps only through Apple’s App Store.”

Per its custom, the U.S. Supreme Court did not issue any comment Monday in taking up the case.

Apple is represented byDaniel Wall from Latham & Watkins in San Francisco.

Mark Rifkin of Wolf Haldenstein Adler Freeman & Herz in New York represents the consumers.

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