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Supreme Court Allows App Store Monopoly Lawsuit Against Apple to Proceed [Updated]
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I don't see how this is a monopolistic practice. The fee has been the same all along and it applies to all apps. Unless they are making side deals with some app makers to reduce the fee, there is no problem here. If app developers had a problem with this, why did they bother entering the ecosystem?
I would rather Apple make their money in this way, rather than selling my data. I would rather Apple have an App store where they can ensure Apps aren't violating data privacy and a providing a consistent user experience.
The only people that will benefit from this ruling are going be the lawyers.
I would rather Apple make their money in this way, rather than selling my data. I would rather Apple have an App store where they can ensure Apps aren't violating data privacy and a providing a consistent user experience.
The only people that will benefit from this ruling are going be the lawyers.
If that is what you want buy an Android phone.
That couldn't be farther from the truth ignoring all the metaphors.
By your seriously flawed metaphor, an app developer has to only sell their app content through the App Store and their are literally hundreds of thousands of apps on both iOS and Android. Netflix is a perfect example for that. All you need is to subscribe from their portal online and sign into the app on your iPhone to enjoy their content.
You're only paying the extra when you subscribe via App Store.
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This seems personal rather than logical.
Of course no one would be able to find their apps. Developers should be thankful the store exists and they have a zero friction place to sell their apps.
If there is someone to be mad at it is all of the other developers who sell their apps for 99 cents.
I would cry with joy, being able to side load popcorn time and emulators without having to rely on enterprise certificates that can be revoked at anytime would be heaven on earth.
Could Apple fans get any more ridiculous than that? Are you suggesting that unlocked iPhone can harm App Store by downloading stuff from it? If that were the case they could also harm all other web sites on the Internet. So these iPhones (as well as all Android phones and all laptops and desktops) should be banned from the Internet.
Unfortunately, we have too many AAPL investors on this site masquerading as Apple fans (well, they are Apple fans, just a different kind of fans) who react extremely negatively to any idea that may lower Apple profits. AAPL being down 5% today is bringing a lot of this sort of "fans" to this thread.
My guess, it’s going to be a few years before there is a verdict. Don’t count your chickens before they hatch, is applicable.
So I read the case. And these were some nuggets that I pulled out of the arguments for the case to proceed. I'm not a lawyer, but these seemed to stand out the most to me in all 28 pages of the document:
In the Affirmative:
In this case, however, several consumers contend that Apple charges too much for apps. The consumers argue,in particular, that Apple has monopolized the retail market for the sale of apps and has unlawfully used its monopolistic power to charge consumers higher-than-competitive prices.
And they allege that they have “paid more for their iPhone apps than they would have paid in a competitive market.”
Apple exercises monopoly power in the retail market for the sale of apps and has unlawfully used its monopoly power to force iPhone owners to pay Apple higher-than-competitive prices for apps.
It is undisputed that the iPhone owners bought the apps directly from Apple. Therefore, under
Illinois Brick, the iPhone owners were direct purchasers who may sue Apple for alleged monopolization.
There is no intermediary in the distribution chain between Apple and the consumer.
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—whether, for example, the retailer employed a markup or kept a commission.To be sure, if the monopolistic retailer’s conduct has not caused the consumer to pay a higher-than-competitive price, then the plaintiff ’s damages will be zero. Here, for example, if the competitive commission rate were 10 per-cent rather than 30 percent but Apple could prove that app developers in a 10 percent commission system would always set a higher price such that consumers would pay the same retail price regardless of whether Apple’s com-mission was 10 percent or 30 percent, then the consumers’damages would presumably be zero.
The consumers seek damages based on the difference between the price they paid and the competitive price. The app developers would seek lost profits that they could have earned in a competitive retail market.
The Dissenting opinion:
The problem is that the 30% com-mission falls initially on the developers. So if the commission is in fact a monopolistic overcharge, the developers are the parties who are directly injured by it. Plaintiffs can be injured
only if the developers are able and choose to pass on the overcharge to them in the form of higher app prices that the developers alone control. Plaintiffs admit-ted as much in the district court, where they described their theory of injury this way: “f Apple tells the developer . . . we’re going to take this 30 percent commission . . .what’s the developer going to do? The developer is going to increase its price to cover Apple’s . . . demanded profit.”
Consider first the question of causation. To determine if Apple’s conduct damaged plaintiffs at all (and if so, the magnitude of their damages), a court will first have to explore whether and to what extent each individual app developer was able—and then opted—to pass on the 30%commission to its consumers in the form of higher app prices. Sorting this out, if it can be done at all, will entail wrestling with “‘complicated theories’” about “how the relevant market variables would have behaved had there been no overcharge.”
So courts will have to divvy up the com-missions Apple collected between the developers and the consumers. To do that, they’ll have to figure out which party bore what portion of the overcharge in every purchase. And if the developers bring suit separately from the consumers, Apple might be at risk of duplicative dam-ages awards totaling more than the full amount it collected in commissions. To avoid that possibility, it may turn out that the developers are necessary parties who will have to be joined in the plaintiffs’ lawsuit.
To evade the Court’s test, all Apple must do is amend its contracts. Instead of collecting payments for apps sold in the App Store and remitting the balance (less its commission) to developers, Apple can simply specify that consumers’ payments will flow the other way: directly to the developers, who will then remit commissions to Apple. No antitrust reason exists to treat these contractual arrangements differently, and doing so will only induce firms to abandon their preferred—and presumably more efficient—distribution arrangements in favor of less efficient ones, all so they might avoid an arbitrary legal rule.
The plaintiffs have not asked us to overrule our precedent—in fact, they’ve disavowed any such re-quest. Tr. of Oral Arg. 40. So we lack the benefit of the adversarial process in a complex area involving a 40-year-old precedent and many hard questions. For example, if we are really inclined to overrule
Illinois Brick, doesn’t that mean we must do the same to
Hanover Shoe? If the proximate cause line is no longer to be drawn at the first injured party, how far down the causal chain can a plain-tiff be and still recoup damages? Must all potential claim-ants to the single monopoly rent be gathered in a single lawsuit as necessary parties (and if not, why not)?
Personal Opinion:
I think that the case probably shouldn't be proceeding. It's definitely an uphill battle for the plaintiffs to prove a monopoly, or that any anti-trust laws were broken. Such a case isn't going to change the App Store, or allow other app stores to be created, if anything, Apple will likely just have to re-frame the EULAs that users agree to within the App Store, as well as the Developers EULA as well.
It's an interesting case, and I'm kinda excited to see where it will lead, but I don't think it's the case that we all may have thought it was.
In the Affirmative:
In this case, however, several consumers contend that Apple charges too much for apps. The consumers argue,in particular, that Apple has monopolized the retail market for the sale of apps and has unlawfully used its monopolistic power to charge consumers higher-than-competitive prices.
And they allege that they have “paid more for their iPhone apps than they would have paid in a competitive market.”
Apple exercises monopoly power in the retail market for the sale of apps and has unlawfully used its monopoly power to force iPhone owners to pay Apple higher-than-competitive prices for apps.
It is undisputed that the iPhone owners bought the apps directly from Apple. Therefore, under
Illinois Brick, the iPhone owners were direct purchasers who may sue Apple for alleged monopolization.
There is no intermediary in the distribution chain between Apple and the consumer.
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—whether, for example, the retailer employed a markup or kept a commission.To be sure, if the monopolistic retailer’s conduct has not caused the consumer to pay a higher-than-competitive price, then the plaintiff ’s damages will be zero. Here, for example, if the competitive commission rate were 10 per-cent rather than 30 percent but Apple could prove that app developers in a 10 percent commission system would always set a higher price such that consumers would pay the same retail price regardless of whether Apple’s com-mission was 10 percent or 30 percent, then the consumers’damages would presumably be zero.
The consumers seek damages based on the difference between the price they paid and the competitive price. The app developers would seek lost profits that they could have earned in a competitive retail market.
The Dissenting opinion:
The problem is that the 30% com-mission falls initially on the developers. So if the commission is in fact a monopolistic overcharge, the developers are the parties who are directly injured by it. Plaintiffs can be injured
only if the developers are able and choose to pass on the overcharge to them in the form of higher app prices that the developers alone control. Plaintiffs admit-ted as much in the district court, where they described their theory of injury this way: “f Apple tells the developer . . . we’re going to take this 30 percent commission . . .what’s the developer going to do? The developer is going to increase its price to cover Apple’s . . . demanded profit.”
Consider first the question of causation. To determine if Apple’s conduct damaged plaintiffs at all (and if so, the magnitude of their damages), a court will first have to explore whether and to what extent each individual app developer was able—and then opted—to pass on the 30%commission to its consumers in the form of higher app prices. Sorting this out, if it can be done at all, will entail wrestling with “‘complicated theories’” about “how the relevant market variables would have behaved had there been no overcharge.”
So courts will have to divvy up the com-missions Apple collected between the developers and the consumers. To do that, they’ll have to figure out which party bore what portion of the overcharge in every purchase. And if the developers bring suit separately from the consumers, Apple might be at risk of duplicative dam-ages awards totaling more than the full amount it collected in commissions. To avoid that possibility, it may turn out that the developers are necessary parties who will have to be joined in the plaintiffs’ lawsuit.
To evade the Court’s test, all Apple must do is amend its contracts. Instead of collecting payments for apps sold in the App Store and remitting the balance (less its commission) to developers, Apple can simply specify that consumers’ payments will flow the other way: directly to the developers, who will then remit commissions to Apple. No antitrust reason exists to treat these contractual arrangements differently, and doing so will only induce firms to abandon their preferred—and presumably more efficient—distribution arrangements in favor of less efficient ones, all so they might avoid an arbitrary legal rule.
The plaintiffs have not asked us to overrule our precedent—in fact, they’ve disavowed any such re-quest. Tr. of Oral Arg. 40. So we lack the benefit of the adversarial process in a complex area involving a 40-year-old precedent and many hard questions. For example, if we are really inclined to overrule
Illinois Brick, doesn’t that mean we must do the same to
Hanover Shoe? If the proximate cause line is no longer to be drawn at the first injured party, how far down the causal chain can a plain-tiff be and still recoup damages? Must all potential claim-ants to the single monopoly rent be gathered in a single lawsuit as necessary parties (and if not, why not)?
Personal Opinion:
I think that the case probably shouldn't be proceeding. It's definitely an uphill battle for the plaintiffs to prove a monopoly, or that any anti-trust laws were broken. Such a case isn't going to change the App Store, or allow other app stores to be created, if anything, Apple will likely just have to re-frame the EULAs that users agree to within the App Store, as well as the Developers EULA as well.
It's an interesting case, and I'm kinda excited to see where it will lead, but I don't think it's the case that we all may have thought it was.
The concept of this lawsuit isn’t as great as it sounds. Sure there’s only one App Store and sure Apple is making commission.
But most people have very poor judgement skills and won’t know what is a trustworthy version of an app vs what isn’t. That’s why the App Store exists. You can’t possibly mess it up. But the customers always think they’re right...especially when they’re horribly wrong.
But most people have very poor judgement skills and won’t know what is a trustworthy version of an app vs what isn’t. That’s why the App Store exists. You can’t possibly mess it up. But the customers always think they’re right...especially when they’re horribly wrong.
Why do people think there's something political behind everything someone does?
Damages should not be as difficult to calculate or illicit from an expert as the dissent states, which is what the majority states in the opinion. On the PC side, Steam takes 30% from developers and the competition Epic takes 12%. Games on Epic actually have sold sometimes for less than on steam such as Metro Exodus. Apple doesn’t allow developers or consumers to judge for themselves whether or not an app is better suited or virus proof on another App Store. Competition is good for an App Store no matter how marginal the price of an app is, look at the pressure that epic has put on steam by offering a lower price to incentivize limited times exclusive games and look at the pressure steam fans have put on Epic to be more consumer friendly with less spyware. I also agree with the majority of the court that retails businesses like Walmart could be a monopoly capable of being sued if there were not other similar retail stores like target for so summers or manufactures to sell from, and that simply letting manufactures set a MSRP does not prevent an intermediary seller like Apple from bottlenecking as a monopoly for summers locked into cell phone contracts on that platform. The only hurdle for this lawsuit truly will be whether or not it is a monopoly when there is an initial choice of iPhone or Android (Android is more of an open marketplace to other app stores like Epic’s independent distribution of fortnite outside of the google play store), but the fact that there is only one other platform (Android) and that Apple has such a large user base and that Apple has such a large share of smartphone profits and difficulty for most users to transfer to Android during a two year cell phone contract will likely result in Apple being held as a monoplist to consumers or developers like Epic who want to reach Apples large group of users.
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And I agree with this. But it doesn’t change the fact that there’s only one option for app developers at the moment. I’m somewhat conflicted on this as I see the security benefits but at the same time macOS doesn’t have the same requirement, so why should iOS?
Good to see it move forward, & hopefully it puts ALOT of visibility on what this App Dev sees as the real main issue, AAPL's Total & Complete "Stranglehold on App Discovery".
And, it's Easy to Prove AAPL has a Monopoly, based upon the apps that they have Recommended in the iOS App Store ... some their own, some 1st versions of third party apps that should have NOT been recommended ... both, when compared to existing third party apps ... the Data Points speak for themselves, & any good researcher could dig them out (of the iOS app store).
And, it's Easy to Prove AAPL has a Monopoly, based upon the apps that they have Recommended in the iOS App Store ... some their own, some 1st versions of third party apps that should have NOT been recommended ... both, when compared to existing third party apps ... the Data Points speak for themselves, & any good researcher could dig them out (of the iOS app store).
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It's not a monopoly as long as you have Android. You should probably refer to a textbook that has the actual definition of Monopoly.
It is outlandish because the core issue is Apple mandates you use them for payment processing. If you are selling an app or something digital through an in-app purchase you have no choice but to use Apple to handle the revenue collection and remittance.
If Apple were to separate app hosting from payment processing I think this whole thing would go away. Apple may need to charge a per-download fee to cover the hosting costs (or maybe not since apps drive hardware sales), but those developers that want to handle their own payments could get out of a large part of the "Apple Tax".
Smartphone monopoly is not what this is about. Apple does not have a monopoly on smartphones/mobile devices. As you guys have pointed out, we have the option of buying a smart phone/mobile device from another company.
This is about a monopoly on app distribution for Apple iOS mobile devices. You cannot get apps from another App Store can you?
You guys see the difference?
Just answer this... If I wanted to get apps for my Apple iOS smart phone/mobile devices where do I go? What are my options?
You guys see it now?
I like the App Store and would rather get my apps from it than from an unsecured website but I do see the monopoly point.
It will be interested to see where this goes.
You can choose to buy Android apps from the Google Play Store. Or you can choose to buy them someplace else. The choice is yours to make.
You can also buy Android apps from Amazon.
On a Samsung smartphone, you can buy apps from the Galaxy Store. Or you can buy apps from the Google Play Store. Or you can buy apps from Amazon. Or you can buy apps from someplace else.
On a Windows computer, you can buy software applications from Microsoft's own store. Or you can buy them from someplace else.
You see. You have choices on Android or Windows. On iOS, you do not.
Negative, its the only way to get it to Apple users. Other platforms exist to distribute their apps: Android, Roku, Mac Desktop, Android TV, Smart Cast, Web OS, MS Windows, Web Apps. Probably more.
If consumers don't like it, then stop buying iPhones and stop buying apps through the App Store. That'll be the day.
This is how business works in a free market. Rather than taking a corporation to court, boycott them until they lower their prices. If you cannot get a significant amount of people to boycott, then maybe your cause isn't worth it since others do not believe in it.
This is how business works in a free market. Rather than taking a corporation to court, boycott them until they lower their prices. If you cannot get a significant amount of people to boycott, then maybe your cause isn't worth it since others do not believe in it.
This is about iOS app distribution monopoly not smartphone/mobile device monopoly.
If I wanted to get apps for my iOS device, where do I go?
In pre-iPhone pre-AppStore times Symbian and Windows Mobile apps were $20-30.
Now apps cost generally $2-3, apart from some exceptions.
Mobile apps and games are cheaper than ever.
30% (or 15% in subscriptions after 12 months) is a sizeable cut though and AppStore generates lots of revenue and profit.
But what is a fair percentage? 20%? 15%? 10%?
There are thousands of people working on app reviews and developer tools. Enabling the app ecosystem isn’t free.
Now apps cost generally $2-3, apart from some exceptions.
Mobile apps and games are cheaper than ever.
30% (or 15% in subscriptions after 12 months) is a sizeable cut though and AppStore generates lots of revenue and profit.
But what is a fair percentage? 20%? 15%? 10%?
There are thousands of people working on app reviews and developer tools. Enabling the app ecosystem isn’t free.
So you will still be able to buy your apps through the app store and continue to pay your 30% premium.
I only buy apps for my Samsung Galaxy S8+ through either the Google Play Store or the Samsung Galaxy Store. Regardless of the ultimate outcome of this ruling I will still continue to buy iOS apps through Apple's app store and continue to pay the 30% premium.
An alternative app store wouldn't change that. Old 32 bit apps don't run under iOS anymore.