Apple sees the App Store as one of its major tentpole business ventures. That certainly makes sense, considering the digital storefront generates a ton of revenue for the company on a yearly basis.
But while some customers, and developers, may be perfectly okay with Apple’s walled garden approach to app distribution, some are not. That has led to a major antitrust case against the company, which dates back to 2011. This was filed as as “Pepper et al v. Apple”, customers have alleged that it is impossible for there to be “price competition” with apps, iOS apps specifically, because Apple does not allow third-party sources to sell those same apps. Ultimately, the lawsuit believes this led to higher app prices and gives Apple the ability to charge excessive commissions for those apps sold in its digital storefront.
In 2013, however, the effort was dismissed by a judge. However, a U.S. Appeals Court judge revived the initiative, and stated that the customers who filed against Apple could move forward with their antitrust claim against the Cupertino-based company.
There has been a lot of back-and-forth, as these types of lawsuits typically do, but we may see even bigger movement on it soon. According to a report on Monday by Reuters, the United States Supreme Court does indeed appear “open” to hearing the antitrust lawsuit against Apple.
“U.S. Supreme Court justices on Monday appeared open to letting a lawsuit proceed against Apple Inc that accused it of breaking federal antitrust laws by monopolizing the market for iPhone software applications and causing consumers to overpay.”
The base of the argument here, which was leveled by Robert Pepper and three additional plaintiffs, is that app prices would be lower if Apple was not locking down the sales of those digital goods through the App Store and only the App Store. Pepper believes developers have been passing the cost of those inflated prices to app buyers, because Apple’s 30% cut is unavoidable.
Indeed, it’s not completely unheard of to see this happen. Spotify, for instance, has railed against the “Apple Tax” for quite some time. There was a time when the music streaming platform was charging more per month ($12.99) for a standard monthly plan when iOS users subscribed directly through the App Store. To compare, the standard monthly plan for an individual is $9.99 per month. That wasn’t great, and Spotify officially ended that option altogether not too long ago, so Spotify subscribers have to subscribe directly from the platform.
This could lead to a major decision for Apple, whether it comes down to changing the App Store’s model. A decision against Apple by the U.S. Supreme Court could also result in the company having to pay out hundreds of millions of dollars, to offset the inflated app prices. We’ll just have to wait and see what happens.