Apple has approached the United States Supreme Court in an attempt to prevent a group of customers from suing it for monopoly abuse. The firm is embroiled in a struggle with a group of irate iPhone owners who believe that they are being forced to overpay for apps because Apple is blocking rivals to its App Store.
These owners won a class action case against Apple in 2017, but the firm wants the Supreme Court to overturn that decision. If it fails, then the whole business model of the highly lucrative App Store could come under threat.
Last year, the Cupertino-based firm earned around £30bn from its 30% share of all apps sold via the App Store.
The customers feel that this is proof of Apple abusing its monopoly position over iPhone owners. They stated: “iPhone consumers nationwide have paid [Apple] hundreds of millions of dollars more for iPhone apps than they would have paid in a competitive market.”
Apple’s view is that app developers determine the amount they want to charge for their apps, and that iPhone owners buy the apps directly from them. The firm wants the court to set aside the 1977 Supreme Court ruling that “direct purchasers” can file for damages in the case of antitrust abuse.
The lobby group, however, claims that since Apple determines the minimum price for apps, it is the actual seller, and not the app developer. The case will be heard by the Supreme Court on Monday, but it could be months before a decision is announced.
Should Apple’s court application fail, it might be faced with years of further court battles. In that case, the plaintiffs must still convince the court that the App Store is a monopoly and that Apple’s 30% commission has pushed up prices.
University of Wisconsin professor Peter Carstensen expects the Supreme Court to rule in favour of Apple.