Supreme Court rules that consumers can sue Apple for App Store practices

Apple lost its Supreme Court cases against Pepper.                  SEAN GALLUP  Getty Images

Apple lost its Supreme Court cases against Pepper. SEAN GALLUP Getty Images

The consumers' complaint against Apple is the kind of case earlier high court rulings said was not allowed under federal laws that prohibit unfair control of a market, Gorsuch wrote.

The ruling will allow iPhone users to pursue an antitrust lawsuit against the company, which could lead to a decision that forces Apple to change its App Store purchase model and policies.

Apple argued that the iPhone owners do not have the right to sue because Apple is an intermediary. Apple, meanwhile, argued that only app developers - and not users - should be able to bring this lawsuit against Apple. Apple argued that it was not a monopoly, rather a platform for app developers who can set their own prices.

The case involves whether or customers technically buy apps from Apple, or whether Apple is a middleman connecting app developers with consumers.

But now the antitrust lawsuit can go ahead, which could have ramifications for other tech companies who offer platforms for services.

"If a retailer has engaged in unlawful monopolistic conduct that has caused consumers to pay higher-than-competitive prices, it does not matter how the retailer structured its relationship with an upstream manufacturer or supplier", the opinion said.

In a 5-4 decision, the Supreme Court sided with four iPhone owners who contend the company has been inflating prices on the App Store -which is now the only official place to download apps for iOS devices.

The 5-4 decision could add to pressure the company faces to cut the 30 per cent commission it charges on app sales.

This is an antitrust case, in the sense that the plaintiffs want the chance to prove in court that Apple's App Store is effectively a monopoly.

Apple's stock opened Monday at its lowest point in six weeks due to the escalating U.S.

Apple has said the consumers were indirect purchasers, at best, because any overcharge would be passed on to them by developers. The iPhone owners pay the alleged overcharge directly to Apple. Current antitrust laws allow the plaintiffs to recover three times the amount of damages.

However, in writing for the majority Justice Brett Kavanaugh rejected the argument.

It is worth noting that neither side really dug into the realities of app stores and digital marketplaces, relying instead on precedents about bricks and shoes (Hanover Shoe v United Shoe Machinery, 1968) to make their case. Other antitrust experts were excited by the Supreme Court's decision, especially those who criticize the tech industry for being too powerful with such power in the hands of only a few giant companies.

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