Supreme Court looks ready to let customers sue Apple for abusing its App Store monopoly

The Supreme Court hearing on Pepper v Apple has not gone well for Apple; the Supremes are considering whether App Store customers are entitled to sue Apple over its monopoly control over the Ios App Store.

The plaintiffs say that Apple's 30% commission and control over pricing (exerted through search ranking and other mechanisms) raise prices on apps, and that they should be entitled to sue Apple for the additional expense its customers bear due to this monopolistic control. The framing is important: since the Reagan era, US antitrust has been dominated by the "public harm" standard, which says that the only monopolies that matter are the ones that result in price increases for consumers -- all other forms of market domination are within bounds in this theory.

Apple argues that whether or not the public is being harmed by elevated app pricing, the App Store customers don't have standing to sue. They cite a case called Illinois Brick, which concerned a brickworks cartel that conspired to raise prices on bricks that were sold to masons, who then passed the price-hikes on to consumers. In that case, the customers didn't have standing to sue the brick cartel, because they were buying their bricks through an intermediary.

But App Store customers don't buy their apps from third parties (quite the contrary: Apple famously takes steps to prevent people from buying apps anywhere but its App Store), they buy them from Apple.

It's always hard to say how the Supremes will rule, but based on the argument, it seems like Apple is likely to lose. Read the rest