The information on this website is presented as a service for our clients and Internet users and is not intended to be legal advice, nor should you consider it as such. Although we welcome your inquiries, please keep in mind that merely contacting us will not establish an attorney-client relationship between us. Consequently, you should not convey any confidential information to us until a formal attorney-client relationship has been established. Please remember that electronic correspondence on the internet is not secure and that you should not include sensitive or confidential information in messages. With that in mind, we look forward to hearing from you.

Skip to Content

Supreme Court Upholds Ninth Circuit Decision: Antitrust Action Against Apple May Proceed

In a 5-4 ruling issued on Monday, the U.S. Supreme Court in Apple Inc. v. Pepper determined that iPhone users may proceed with their claims against Apple over its alleged anticompetitive app store practices. The decision upholds the Ninth Circuit’s finding that the plaintiffs are direct purchasers with standing to bring their claims against Apple.

The interpretation of this key issue — whether the plaintiff is a “direct purchaser” under the rule established by the landmark decision, Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), and therefore allowed to recover damages for antitrust overcharge injuries — is often at the forefront of antitrust actions.

In this case, the plaintiff iPhone users claimed that Apple exercises its monopoly power to charge higher-than-competitive prices for the apps sold in Apple’s App Store. The plaintiffs asserted that, as iPhone users, they are prevented from purchasing apps anywhere other than the App Store and have no choice but to pay the prices charged.

Apple argued the plaintiffs were not direct purchasers, and thus barred by Illinois Brick from bringing their claims. Because the app developers were charged the commissions, and the developers set the app prices, Apple asserted that only the app developers could have standing to claim any overcharge injury.

The Supreme Court disagreed. Justice Brett Kavanaugh, writing for the majority, stated, “The plaintiffs purchased apps directly from Apple and therefore are direct purchasers.” He further explained, “The plaintiffs’ allegations boil down to one straightforward claim: that Apple exercises monopoly power in the retail market for the sale of apps and has unlawfully used its monopoly power to force iPhone owners to pay Apple higher-than-competitive prices for apps.”

In dissent, Justice Neil Gorsuch stated the decision did not “afford Illinois Brick full effect,” because the app developers were the ones forced to pay the overcharges, and the only ones who could sue.

While this decision allows the plaintiffs to go forward with their action, the Supreme Court was careful to note that the merits of the claims remain to be decided in the district court where the case will proceed.

©2024 Carlton Fields, P.A. Carlton Fields practices law in California through Carlton Fields, LLP. Carlton Fields publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information and educational purposes only, and should not be relied on as if it were advice about a particular fact situation. The distribution of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship with Carlton Fields. This publication may not be quoted or referred to in any other publication or proceeding without the prior written consent of the firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our Contact Us form via the link below. The views set forth herein are the personal views of the author and do not necessarily reflect those of the firm. This site may contain hypertext links to information created and maintained by other entities. Carlton Fields does not control or guarantee the accuracy or completeness of this outside information, nor is the inclusion of a link to be intended as an endorsement of those outside sites.