The Supreme Court Takes a Bite Out of Apple

Remember the last time you needed an app for your Apple cell phone and downloaded it from somewhere other than the Apple Store?

No, we don’t, either.

That was the gist of a lawsuit which wound up in the Supreme Court, alleging that Apple is using its monopoly power to force consumers to purchase apps at monopoly prices, which are presumably higher than they would be from other sources. As cell phone repair experts, we are always fascinated by advances and changes in the industry, whether they be cell phone units in need of repair, of cell phone manufacturers in need of being reigned in.

Apple adds 30%

Apple denies their guilt, saying consumers can get apps from other sources, presumably meaning they can dump their expensive Apple phone and expensive Apple accessories and defect to Android if they don’t like the cost of an app. But, the Supreme Court voted 5-4 against Apple, with Brett Kavanaugh siding with the liberal side of the court, and, in fact, penning their decision which was based, in part, on the fact that Apple takes a 30% revenue cut from every app sold out of their store. The plaintiffs (Pepper) in Apple vs. Pepper say app develops have to add it to the price of the app to offset the fee. The cost is then passed on to the consumer.

The snag

Since the “the Illinois Brick doctrine” states that direct purchasers can only bring lawsuits against manufacturers, Apple felt it should be in the clear. Four of the more conservative judges agreed with Apple. However, it wasn’t enough to free Apple from the burden of liability, since the other five believed consumers were stuck with Apple as their source.

The decision

The decision reached by the Supreme Court has just given purchasers the right to take on Apple, should they be so inclined, which many may be, to sue Apple if they think they’ve been overcharged for apps. Because Apple is the only game in (app) town, Apple’s argument that they’re a hapless middleman doesn’t hold water.

The future

In all likelihood, this will result in a flurry of class action suits, given the potential deep pockets of Apple. Whether anything will come of them, or whether it will merely result in a lot of sue-happy lawyers collecting fees, remains to be seen. The outcome begs the question of which of these Justices have an Apple phone and which have an android phone.

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