The 9th U.S. Circuit Court of Appeals has ruled that consumers can now begin suing Apple for the charge of monopoly in the way it conducted its business at the App Store. The court has effectively reversed a district court's dismissal of an antitrust complaint, one of the several class-action suits against the company.
On Apple's Anticompetitive Practice
The decision stemmed from a case filed last 2011 wherein several iPhone users complained that the company's rule of having the device run apps that are available exclusively in the Apple marketplace is anticompetitive. This covered the years 2007 through 2013.
The lower court's dismissal, which has been the subject of the appeal, was based on the argument that the complaint lacked statutory standing. It has given Apple's position merit, which held that its customers are purchasing apps from developers and that its role is analogous to a building owner, renting out spaces to its tenants.
According to the appellate court, the dynamics of the transactions transpiring in the App Store is tantamount to the condition wherein consumers are purchasing directly from Apple. Aside from the fact that Cupertino is directly transacting with customers instead of the developers, one should note that Apple itself receives a cut whenever an app gets sold.
Right To Sue vs. Merit
To be clear, the appeals court only ruled on the issue about whether the public has the right to sue Apple. It did not yet resolve Cupertino's culpability in the antitrust charge.
At this point, the court has only stated that the procedural nature of the case is complex. It has noted, however, how the Apple ecosystem is closed and restrictive.
"Apple prohibits app developers from selling iPhone apps through channels other than the App Store, threatening to cut off sales by any developer who violates this prohibition," the court cited the plaintiff's allegation.
Potential Impact
The latest ruling has achieved no significant milestone in the way Apple is expected to conduct its affair at the App Store. It has merely opened the company to a legal challenge that could take years before it is resolved.
But if the judicial system does find that Apple's model is indeed anticompetitive, then that impact will be quite dramatic.
"The obvious solution is to compel Apple to let people shop for applications wherever they want, which would open the market and help lower prices," Mark Rifkin, the lawyer representing the complainants, said in a Reuters report. "The other alternative is for Apple to pay people damages for the higher than competitive prices they've had to pay historically because Apple has utilized its monopoly."
Apple has not released any statement on the issue so far. It has also faced several antitrust lawsuits involving its products such as the iPhone as well as its alleged eBook price fixing.
