Supreme Court rules iPhone users may sue Apple for possible antitrust violations

Supreme Court rules iPhone users may sue Apple for possible antitrust violations

The US Supreme Court on Monday affirmed a Ninth Circuit decision allowing a lawsuit against Apple for alleged anti-competitive practices to proceed.

In 2011 a group of iPhone owners sued Apple, claiming that company’s App Store violated antitrust laws by artificially inflating the prices of apps with no possibility of shopping elsewhere. According to the owners, when they wish to purchase an app for their iPhones, “they have only two options: (1) buy the app from Apple’s App Store at a higher-than-competitive price or (2) do not buy the app at all.” Apple moved to dismiss the complaint, arguing that they were merely an intermediary and the prices in the App Store were set by third-party developers, and therefore the owners had no standing to sue. Though the District Court agreed with Apple and dismissed the complaint, the US Court of Appeals for the Ninth Circuit reversed the ruling.

In a 5-4 split decision, the Supreme Court affirmed the Ninth Circuit’s decision, holding that iPhone owners were direct consumers of Apple and could sue the company. Justice Brett Kavanaugh, writing for the majority, said that the decision was “straightforward” based on the text of the Sherman Antitrust Act and Clayton Act.” The statutory text,” stated Kavanaugh, “which states that ‘any person’ injured by an antitrust violation may sue to recover damages,” is purposefully broad and should allow for lawsuits from consumers who have an injury caused by a company that only runs the storefront. Moreover, Kavanaugh argued that the lawsuit should be permitted to proceed for policy reasons, as adopting Apple’s position would “provide a roadmap for monopolistic retailers to structure transactions with manufacturers or suppliers so as to evade antitrust claims.” Kavanaugh was joined by the liberal wing of the court, while Chief Justice John Roberts and Justices Samuel Alito, Clarence Thomas and Neil Gorsuch dissented.