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Supreme Court lets App Store monopoly suit go forward

Three men take a selfie together
Apple CEO Tim Cook takes a selfie this weekend. Photo: Win McNamee/Getty Images

The Supreme Court ruled Monday that a group of iPhone users can move forward with their suit against Apple over allegations the company has built an illegal monopoly on the sale of applications for the smartphone.

Why it matters: The ruling opens up the possibility of exposure for digital marketplaces to monopoly concerns brought by the people who buy products on them.

The plaintiffs in the case say that Apple has exercised monopoly power over the App Store, which takes a cut from every purchase of a third-party app, resulting in higher prices.

Flashback: Apple was appealing a lower court ruling that the suit could proceed because people who buy apps on the iPhone App Store are directly purchasing them from Apple.

  • That's a key distinction because legal precedent protects companies from being sued by people who make purchases from them indirectly.
  • Apple argued that while it maintained the store, customers could only sue the developers because they set the price of the apps.

Details: The court ruled 5-4 that the customers had directly purchased the apps from Apple, meaning the lawsuit could go forward.

  • It did not rule on whether or not Apple had monopolized the market for apps.

The bigger picture: Developers have raised competition concerns about the App Store as well.

  • Spotify says that the cut Apple takes from in-app subscriptions disadvantages the company in its battle with Apple's own streaming service, Apple Music.

Go deeper: Read the court's opinion