The Supreme Court has ruled on a key question in Apple Inc v Pepper,
a class action suit arguing that the App Store violated antitrust law
by driving up prices through the monopolistic tactic of prohibiting
users from buying apps from third parties, and then taking a 30%
commission on every app sold, which led software companies to raise
prices in order to remain profitable after Apple had taken its cut.
Apple had asked the Supreme Court to prevent the case from moving
forward on the grounds that Apple customers were really buying apps from
the software vendors, and not through the App Store (in Apple’s view,
the App Store isn’t a store, just a commission-collecting system). Not
only is this obviously ridiculous, it’s also an area where there’s good
precedent in the form of the 1977 Illinois Brick Co. v. Illinois Supreme Court case, which SCOTUS cited in their opinion.
The court split 5-4, with Brett Kavanaugh siding against Apple and
writing the opinion. In some ways, this isn’t surprising, for two
reasons: one, Apple had terrible arguments, as it’s obvious
that the App Store is a store, and two, the one form of antitrust
enforcement conservatives are willing to tolerate is preventing “consumer harm” in the form of higher prices.
The ruling means that the lawsuit can proceed and the plaintiffs can try
to show that Apple did indeed violate antitrust law. If they win, it
will have an enormous impact on all the tech platforms that operate
“two-sided marketplaces” from eBay and Etsy to Uber and Lyft to Amazon
and Google Play.
