The suit by iPhone users could force Apple to cut the 30 percent commission it charges software developers.<\/b>
\nWASHINGTON \u2014 The Supreme Court seemed ready Monday to allow an antitrust lawsuit to go forward that claims Apple has unfairly monopolized the market for the sale of iPhone apps.
Apple faced skeptical questions from justices who seemed concerned about the control that the Cupertino, California-based company exerts over iPhone users who must purchase software for their smartphones exclusively through its App Store.
The arguments dealt with the fruits of technology that, over the past 10 years, have made more than 2 million apps available to iPhone users, but in the courtroom there were also references to older antitrust cases involving concrete, aluminum, natural gas and shoes.
The suit by iPhone users could force Apple to cut the 30 percent commission it charges software developers whose apps are sold through the App Store. A judge could triple the compensation to consumers under antitrust law if Apple ultimately loses the suit.
But the issue before the high court at this early stage is whether the case can proceed at all.
Justice Stephen Breyer, who used to teach antitrust law at Harvard Law School, said the consumers\u2019 case seemed straightforward and in line with a century of antitrust law.
Apple argues it\u2019s merely a pipeline between app developers and consumers, and that iPhone users have no claims against Apple under federal laws that prohibit unfair control of a market.
Tens of thousands of software developers set the prices and agree to pay Apple a 30 percent commission on whatever they sell, the lawyer representing Apple said in the courtroom.
If anyone should be able to sue Apple, it\u2019s a developer, Daniel Wall said. \u201cThere have been plenty of disputes, but none has ever gone to litigation,\u201d he said.
Chief Justice John Roberts was alone among the nine justices who seemed prepared to agree with Apple.
Among the justices who appeared to be on the other side, Justice Elena Kagan said consumers appear to have a direct relationship with Apple. \u201cI pick up my iPhone. I go to Apple\u2019s App Store. I pay Apple directly with credit card information that I\u2019ve supplied to Apple. From my perspective, I\u2019ve just engaged in a one-step transaction with Apple,\u201d Kagan said.
Justice Brett Kavanaugh said if consumers are paying more than they should, then perhaps they should be able to sue. The relevant federal antitrust law says \u201cany person injured\u201d can sue, Kavanaugh said.
His comments could align him with justices who would allow the suit to proceed. In other cases, the court has ruled there must be a direct relationship between the seller and a party complaining about unfair, anti-competitive pricing.
Consumers can choose from among more than 2 million apps, compared with the 500 apps that were available when Apple created the App Store in 2008. \u201cThe phrase \u2018there\u2019s an app for that\u2019 is now part of the popular lexicon,\u201d Roberts noted in a 2014 decision limiting warrantless searches of cellphones by police. Apple has trademarked the phrase.
But the company says the popularity of software for iPhones and its App Store shouldn\u2019t obscure that consumers buys apps from developers, not Apple. Developers set the prices, though Apple requires prices to end in.99, Wall said. The Trump administration is backing Apple at the high court.
Representing consumers, lawyer David Frederick said the monopoly Apple has over iPhone apps is unique in the digital age. \u201cApple can\u2019t point to another e-commerce distributor that does what it does,\u201d Frederick said. Even Apple allows third parties to sell computer software directly to purchasers of its laptop and desktop computers, he said.
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