ReutersWASHINGTON (Reuters) — A divided U.S. Supreme Court on Monday gave the go-ahead to an antitrust lawsuit accusing Apple Inc. of forcing consumers to overpay for iPhone software applications, a decision that could lead to billions of dollars in damages and put at risk the company’s lucrative way of selling apps.
In a 5-4 ruling, the justices upheld a lower court’s decision to allow the proposed class action lawsuit to proceed. The consumer plaintiffs claim Apple monopolized the market in violation of federal antitrust law by requiring that apps be sold through its App Store and extracting an excessive 30 percent commission on purchases.
The ruling came on a day when Apple shares already were trading lower because of concerns over a full-blown U.S.-China trade war.
Apple, backed by U.S. President Donald Trump’s administration in the case, argued that it was only acting as an agent for app developers, who set their own prices and pay Apple’s commission.
Monday’s ruling, written by Justice Brett Kavanaugh, did not resolve the merits of the claim against Apple. But if the plaintiffs win at trial, Mark Rifkin, a lawyer representing them, said that “the overcharges paid by consumers since Apple’s monopoly began will be measured in the billions of dollars.”
In a statement, Apple said, “We’re confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric.”
The dispute hinged in part on how the justices would apply a 1977 Supreme Court precedent. In that case, the court limited damages for anti-competitive conduct to those directly overcharged rather than indirect victims who paid an overcharge passed on by others.
Kavanaugh explained from the bench that the 1977 precedent was “not a get-out-of-court-free card for monopolistic retailers,” an apparent allusion to the popular board game Monopoly.
“Apple’s theory would provide a road map for monopolistic retailers to structure transactions with manufacturers or suppliers so as to evade antitrust claims by consumers and thereby thwart effective antitrust enforcement,” Kavanaugh ruled.Speech