The United States Supreme Court ruled that consumers can press ahead with a lawsuit that accuses Apple Inc of using its market dominance to artificially inflate prices at its App Store.
Apple contended the lawsuit was barred under a 1977 Supreme Court ruling that said only direct purchasers of a product can collect damages for overpricing under federal antitrust law. That decision was designed in part to keep companies from having to pay twice for the same misconduct.
"The iPhone owners are not consumers at the bottom of a vertical distribution chain who are attempting to sue manufacturers at the top of the chain," Kavanaugh wrote. "There is no intermediary in the distribution chain between Apple and the consumer."
In dissent, Justice Neil Gorsuch said the ruling "exalts form over substance." He was joined by Chief Justice John Roberts and Justices Samuel Alito and Clarence Thomas.
When a user buys an app, Apple collects the money, keeps the 30% commission and gives the rest to the developer. The company told the high court it passed $26.5 billion on to developers in 2017.
Apple argued that the lawsuitGs focus was the 30% commission, something the company said is paid by the developers, not the app purchasers. Although the consumers said they pay for the commissions through higher app prices, Apple said those are the type of "pass-through" damages barred under the Supreme CourtGs 1977 Illinois Brick v. Illinois ruling.
The case is Apple v. Pepper, 17-204.