U.S. Supreme Court Green Lights Apple App Store antitrust suit, to Proceed Delivering a Major Blow To Apple.

Delivering an early blow to Apple empire, which fought hard to stop the class action suite, in a 5-4 ruling, the justices upheld a lower court's decision to allow the proposed class action lawsuit to proceed.
Monday's ruling, written by Justice Brett Kavanaugh, did not resolve the merits of the claim against Apple. 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. Justice Kavanaugh explained from the bench that the 1977 precedent was "not a get-out-of-court-free card for monopolistic retailers.
"Apple's theory would provide a roadmap for monopolistic retailers to structure transactions with manufacturers or suppliers so as to evade antitrust claims by consumers and thereby thwart effective antitrust enforcement," Justice Kavanaugh wrote in the ruling.
Siding with the consumers, Kavanaugh, a conservative appointed by Trump, joined the court's four liberal justices to rule against Apple.

Dissenting from the decision, conservative Justice Neil Gorsuch, said the decision is "not how antitrust law is supposed to work" because it gives a green light to the exact type of case that the court had previously prohibited. Gorsuch also was appointed by Trump.

The consumer plaintiffs claim Apple monopolized the market in violation of federal antitrust law by requiring that apps be sold through its App Store and extracting an excessive 30 percent commission on purchases.While a lower court still has to decide the merits of the case, the stakes for Apple here are high since its App Store represents a major part of the services business that it’s increasingly relying on as iPhone sales slow down. In its latest earnings report last month, Apple reported that iPhone sales were down while its services segment had grown 16% year-over-year to $11.5 billion.

On the news, Apple's shares fell 5.8% to $185.72. The ruling came on a day when Apple shares already were trading lower because of concerns over a full-blown U.S.-China trade war.

Mark Rifkin, a lawyer representing consumers, said that "the overcharges paid by consumers since Apple's monopoly began will be measured in the billions of dollars. The Justices "reaffirmed the straightforward principle that consumers who purchase a monopolized product directly from the alleged monopolist may sue the monopolist to recover the full amount of the overcharge they are forced to pay by reason of the monopoly."
The plaintiffs, including lead plaintiff Robert Pepper of Chicago, filed the suit in a California federal court in 2011, claiming Apple's monopoly leads to inflated prices compared to if apps were available from other sources. They were supported by 30 state attorneys general, including from Texas, California and New York.
Apple, also backed by the U.S. Chamber of Commerce business group, had sought to dismiss the case, arguing the plaintiffs lacked the required legal standing to sue. After a federal judge in Oakland threw out the suit, the San Francisco-based 9th U.S. Circuit Court of Appeals revived it in 2017, finding that Apple was a distributor that sold iPhone apps directly to consumers.

Reuters