App Store Antitrust Case Could Still Tank

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A new U.S. Supreme Court ruling related to Apple’s App Store has a lot of pundits and press freaking out. But it’s not quite the major loss nor broad-in-scope ruling many are making it out to be.

Yes, the court said an antitrust lawsuit brought against Apple, brought by a small group of consumers, should be allowed to continue. But that doesn’t mean that the consumers’ claims will be found to have any merit. This wasn’t a ruling on the merits of the lawsuit but merely a decision not to shut it down immediately.

“At this early pleadings stage of the litigation, we do not assess the merits of the plaintiffs’ antitrust claims against Apple, nor do we consider any other defenses,” the court stated.

The 5-4 decision—authored by Justice Brett Kavanaugh—saw Kavanaugh siding with more liberal justices in the majority, which of course has raised eyebrows among those who expected him to be basically a Republican puppet.

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In the case, Apple v. Pepper, plaintiffs argue that the App Store is an unfair monopoly. Apple’s lawyers argued that the plaintiffs had no standing to bring the lawsuit, since they’re app users and not app developers.

In the dissent—written by Neil Gorsuch and joined by John Roberts, Clarence Thomas, and Samuel Alito—the justices wrote that the majority’s interpretation was “not how antitrust law is supposed to work.” More from the dissent:

More than 40 years ago, in Illinois Brick Co. v. Illinois … this Court held that an antitrust plaintiff can’t sue a defendant for overcharging someone else who might (or might not) have passed on all (or some) of the overcharge to him. Illinois Brick held that these convoluted “pass on” theories of damages violate traditional principles of proximate causation and that the right plaintiff to bring suit is the one on whom the overcharge immediately and surely fell. Yet today the Court lets a pass-on case proceed. It does so by recasting Illinois Brick as a rule forbidding only suits where the plaintiff does not contract directly with the defendant.

This replaces a rule of proximate cause and economic reality with an easily manipulated and formalistic rule of contractual privity. That’s not how antitrust law is supposed to work, and it’s an uncharitable way of treating a precedent which—whatever its flaws—is far more sensible than the rule the Court installs in its place.


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