Mobile

Apple v. Pepper: The Supreme Court could rule the App Store is a monopoly

Apple is facing yet another antitrust case. The subject this time? Apps. The Supreme Court has agreed to hear Apple Inc. v. Pepper, a case that asks whether or not Apple has monopolized the app market. If the Supreme Court rules against Apple, it could have far-reaching implications for everyone.

At the heart of the dispute is the issue of money. Apple both charges developers 30 percent of their app’s revenue, and prevents iOS devices from being able to install apps from other sources. Because of that, some argue that Apple has inflated the price of iPhone apps in an effort to make more money.

On the other side, Apple argues that the plaintiffs, who are consumers, don’t have the right to sue Apple under current U.S. antitrust laws. The key to that argument, as noted in a report by Wired, is a case from 1977, Illinois Brick Co. v. Illinois, which resulted in a ruling that you can’t sue for an antitrust case if you didn’t directly purchase goods or services. Because of that, Apple says, it’s not selling apps to customers — the developers are through the App Store.

The only problem with that is that the plaintiffs are arguing that Apple has monopolized app distribution — not necessarily apps themselves. There is evidence of that on Android — users can get apps from the Google Play Store, but they can also get them from Amazon and other third-party stores, too, if they so choose.

The case could result in some major changes for consumers and Apple alike. If Apple wins the case, nothing much will change with how it and developers interact, and developers will still be forced to go through the App Store and abide by Apple’s rules. If the plaintiffs win, however, Apple may have to pay hundreds of millions of dollars — and it may have implications for other large tech companies that sell products from third parties, including the likes of Amazon.

According to a report from Bloomberg, the Supreme Court will hear arguments for nine months starting in October. Safe to say, this case has a long road ahead of it.

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