On Monday, the Supreme Court will hear a case alleging that Apple violated antitrust legislation by only allowing developers to sell apps via the App Store.
The lawsuit argues that Apple greatly restricts the freedom of its users by forcing developers to use the App Store, and the App Store alone, to sell their products. In addition, the 30% commission the company takes amounts to price gouging, the plaintiffs, who are a group of iPhone users, contest.
If the lawsuit is successful, the monopoly part of this argument will not be settled – instead, this would allow to the plaintiffs to bring their antitrust case to a lower court. Apple says that the users have no right to do so; in their eyes, only the app developers themselves could even put forward such a suit.
The court is therefore deciding upon whether to overturn precedent set in the 1977 case, Illinois Brick Co. v. Illinois. The state of Illinois had sued brick manufacturers for conspiring together to increase the price of bricks, thereby inflating the housing costs in Illinois. However, the Supreme Court ruled that only the property developers who had purchased the bricks could sue the manufacturer, establishing the so-called “Illinois Brick Doctrine”, where only the direct purchaser can sue a monopoly holder.
Apple has said that the consumers do not purchase from them, but the app developers. The App Store is a marketplace, they argue:
We are hopeful the Supreme Court will recognize Apple’s critical role as a marketplace for apps, and uphold existing legal precedent by finding in favor of Apple and the millions of developers who sell their apps on our platform.
They are supported in this view by the App Association, who have said that “the customer is unequivocally buying from the app developer, not the platform the developer sold their app through.”
However, Professor Herbert Hovenkamp of the University of Pennsylvania School of Law, an expert in antitrust law, says this is a case unlike Illinois Brick. The equivalent party of the brickmakers, the app developers, are innocent, and maybe even victims themselves:
Illinois Brick assumes that you’ve got an antitrust violator, and that violator sells to some innocent retailer or distributor, or someone in the middle, and then that innocent retailer sells to someone who then sues. But, in this case, it’s different: Apple, the alleged violator, is the one in the middle.
The Supreme Court is expected to rule on the case in 2019.