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App Store Antitrust Case Against Apple Allowed to Proceed

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Jan 12, 2017, 6:06 PM by Eric M. Zeman

An on-going lawsuit accusing Apple of holding a monopoly on the market for iPhone apps has been given new life today thanks to an appeals court ruling. The 9th U.S. Circuit Court of Appeals said Apple's sole distribution method of mobile apps for the iPhone may be anticompetitive. The original lawsuit was filed in 2012. It charged that Apple's policy of allowing only apps distributed via the app store onto iPhones violates federal law. Apple's legal argument centered on the idea that the App Store serves only as a platform for end users to buy apps from developers, the iPhone maker sees the App Store as shelf space that is rented out by app writers. However, app developers pay a 30% portion of revenues for the ability to sell via the App Store. Moreover, people pay Apple directly for apps via iTunes; they do not pay developers. Initial rulings in the case sided with Apple, but today's decision reversed lower courts, as iPhone owners cannot buy or install apps via any method other than the App Store, lest they jailbreak (or hack) their device. Apple maintains that this policy protects end user security, but a collection of iPhone owners contend it leads to less competition and higher pricing for mobile apps. It's not clear what the next steps in the case are, nor where they may lead.

Reuters »

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