A divided U.S. Supreme Court on Monday gave the go-ahead to an antitrust lawsuit...
WASHINGTON - A divided U.S. Supreme Court on Monday gave the go-ahead to an antitrust lawsuit accusing Apple Inc of forcing consumers to overpay for iPhone software applications, a decision that could lead to billions of dollars in damages and put at risk the company’s lucrative way of selling apps.
The Cupertino, California-based technology company, backed by U.S. President Donald Trump’s administration in the case, argued that it was only acting as an agent for app developers, who set their own prices and pay Apple’s commission. The dispute hinged in part on how the justices would apply a 1977 Supreme Court precedent. In that case, the court limited damages for anti-competitive conduct to those directly overcharged rather than indirect victims who paid an overcharge passed on by others.
Apple has said the consumers were indirect purchasers, at best, because any overcharge would be passed on to them by developers. The iPhone users who sued countered that they pay Apple - not an app developer - whenever buying an app from the App Store, and were therefore direct victims of the overcharges.
The legal setback for Apple comes as investors are looking to the company’s services business, including its App Store, to fuel growth as iPhone sales slow. The ruling could lead to other lawsuits against tech companies that act as platforms for other products or services. Apple had warned that this could pose a threat to e-commerce, a rapidly expanding segment of the U.S. economy worth hundreds of billions of dollars in annual sales.
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