Is Apple’s App Store a monopoly?
Many, if not most, would agree that the prices charged to download apps from Apple’s App Store are quite modest, when they’re not free. However, an antitrust class action lawsuit brought against the tech giant alleges Apple uses monopolistic power to raise prices on the apps sold on its platform. As it turns out, the Supreme Court of the United States believes that those bringing the suit should, at least, have the opportunity to make their case in court.
By a 5-4 vote, the nation’s highest court sided against Apple in the hearing. The case arrived before the Supreme Court after the U.S. Court of Appeals for the Ninth Circuit ruled that consumers have a right to sue Apple because it is a distributor of products through its App Store. Those bringing the case against Apple claim the company is involved with app makers in setting prices, charges commissions up to 30 percent on sales and dissuades developers from selling on other platforms.
The New York Times reports that developers have sometimes complained about Apple’s control of apps on its marketplace. While larger companies such as Netflix and Spotify offer their apps on their own sites independent of Apple, some smaller companies may not feel they have the same freedom to market their products elsewhere.
In its filing, Apple argued that its App Store “has been widely emulated so that, today, app stores are commonplace, distributing not only iOS apps for iPhones and iPads, but apps for Android devices, desktop and laptop application software, content for gaming platforms and much more.”
The complainants, Apple posited, have plenty of other places to access apps and said that its restrictions and fees are directly tied to assuring that apps sold for iOS are free of malware or other consumer-unfriendly features. The tech giant denied that it sets prices for app developers and claims that it only serves as an agent for developers in selling apps.
Apple’s iPhone models represent fewer than half the smartphones being used in America today.
- In Re Apple iPhone Antitrust Litigation – Supreme Court of the United States
- Supreme Court Allows Antitrust Lawsuit Against Apple to Proceed – The New York Times
- How Apple’s Supreme Court loss could change the way you buy apps – The Verge
- The Supreme Court Just Threw the Concept of Precedent Down on the Floor and Danced on It – Esquire
DISCUSSION QUESTIONS: Do you think Apple’s App store policies are monopolistic in light of market realities? What fallout in the retail market, if any, do you expect if the case is ruled in favor of those bringing the class action suit against Apple prevail?