Apple heading for Supreme Court showdown over iOS App Store 'monopoly' gripe

Cupertino getting little love from the Supremes so far


Apple may soon find itself at the center of a monopoly probe before the United States Supreme Court, based on opening arguments heard on Monday.

Right now, the Supremes are weighing up whether they will hear an appeal in the case of Pepper v. Apple, an antitrust legal battle centering around Cook & Co's strict control of its iOS App Store. So far, the iGiant isn't winning any friends on the bench.

At issue is whether Apple's walled garden approach to its iOS platform – in which developers are pretty much forced to sell their iPhone and iPad software exclusively via Cupertino's official App Store and pay Apple a 30 per cent cut – is artificially raising prices and a violation of US antitrust laws on monopoly control. Sure there are unofficial app shops for jailbroken devices, but those are niche and thwarted by iOS upgrades.

Named plaintiffs Stephen Schwartz, Edward Hayter, Eric Terrell, and Robert Pepper have sought damages on behalf of iOS device owners claiming Apple's policy results in App developers overcharging customers in order to make up for the 30 per cent revenue hit.

Apple has sought to dismiss the case without a jury trial saying that the device owners have no standing to sue, as iOS developers are the ones who choose to do business with Apple and set their own prices.

The long and winding road...

Although the case began in 2011, the Supremes are considering a ruling made four years ago by the Northern California US District Court. At that time, Judge Yvonne Rogers ruled in favor (PDF) of Apple, reasoning that end users of the applications were indirect customers are therefore could not be the ones to sue under US antitrust law.

That ruling was then taken before the Ninth Circuit Court of Appeals who reheard the arguments and reversed (PDF) Rogers' opinion in 2017, ordering the Ninth Circuit to hear the case after all.

Apple appealed that decision to the Supreme Court, who today heard the arguments (PDF) as it decides whether to hear the case.

Thus far, the judges appear to be leaning towards siding with the customers, according to early accounts. Justice Sonia Sotomayor (an Obama appointee) noted how the customers could in fact show that they would have standing to sue under antitrust laws.

Apple

Apple hauled into US Supreme Court over, no, not ebooks, patents, staff wages, keyboards... but its App Store

READ MORE

"They have to go out and prove at the next step how, without this monopoly, they would have paid less. It could be as little as a -- a penny or nothing or it could be something more," Sotomayor said of a possible trial.

"But the point is that this closed loop with Apple as its spoke, they are the first purchaser of that 30 percent markup."

Bush-appointed Justice Samuel Alito also looked to be leaning towards siding with the plaintiffs, seeking out the portions of the Appeals Court decision that found the case to be about Apple's monopoly control of the App Store- a critical part of the case against Cupertino. Fellow conservative appointee Neil Gorsuch also looked to be inclined to side against Apple, suggesting the case Cupertino cited in its claim, Illinois Brick v Illinois, should not be applied in this case.

The court's decision will mean the case either comes to an abrupt end without a jury trial, or continue on what will likely be a years-long process towards setting up a trial. Conducting the full proceedings or agreeing to a settlement would potentially see Apple agree to pay out damages to app users. ®


Other stories you might like

  • Experts: AI should be recognized as inventors in patent law
    Plus: Police release deepfake of murdered teen in cold case, and more

    In-brief Governments around the world should pass intellectual property laws that grant rights to AI systems, two academics at the University of New South Wales in Australia argued.

    Alexandra George, and Toby Walsh, professors of law and AI, respectively, believe failing to recognize machines as inventors could have long-lasting impacts on economies and societies. 

    "If courts and governments decide that AI-made inventions cannot be patented, the implications could be huge," they wrote in a comment article published in Nature. "Funders and businesses would be less incentivized to pursue useful research using AI inventors when a return on their investment could be limited. Society could miss out on the development of worthwhile and life-saving inventions."

    Continue reading
  • Declassified and released: More secret files on US govt's emergency doomsday powers
    Nuke incoming? Quick break out the plans for rationing, censorship, property seizures, and more

    More papers describing the orders and messages the US President can issue in the event of apocalyptic crises, such as a devastating nuclear attack, have been declassified and released for all to see.

    These government files are part of a larger collection of records that discuss the nature, reach, and use of secret Presidential Emergency Action Documents: these are executive orders, announcements, and statements to Congress that are all ready to sign and send out as soon as a doomsday scenario occurs. PEADs are supposed to give America's commander-in-chief immediate extraordinary powers to overcome extraordinary events.

    PEADs have never been declassified or revealed before. They remain hush-hush, and their exact details are not publicly known.

    Continue reading
  • Stolen university credentials up for sale by Russian crooks, FBI warns
    Forget dark-web souks, thousands of these are already being traded on public bazaars

    Russian crooks are selling network credentials and virtual private network access for a "multitude" of US universities and colleges on criminal marketplaces, according to the FBI.

    According to a warning issued on Thursday, these stolen credentials sell for thousands of dollars on both dark web and public internet forums, and could lead to subsequent cyberattacks against individual employees or the schools themselves.

    "The exposure of usernames and passwords can lead to brute force credential stuffing computer network attacks, whereby attackers attempt logins across various internet sites or exploit them for subsequent cyber attacks as criminal actors take advantage of users recycling the same credentials across multiple accounts, internet sites, and services," the Feds' alert [PDF] said.

    Continue reading

Biting the hand that feeds IT © 1998–2022