Question
Apple Inc. is a multinational technology company based in America. Apple is amongst one of the largest mobile phone companies across the globe. Owners of
Apple Inc. is a multinational technology company based in America. Apple is amongst one of the largest mobile phone companies across the globe. Owners of the iPhone can buy Apple applications in the Apple store, where Apple sells applications directly. Independent developers develop most of the applications available on Apple stores under contract with Apple. The developers are charged $99, by Apple, as an annual membership fee; Apple also provides them an opportunity to fix the retail price of the applications. Apple charges a 30% commission on the sale of every application through the Apple store. Four iPhone owners filed a lawsuit on Apple, alleging that the company has monopolized the market for iPhone applications(Gavil, 2019).
The general jurisdiction ruling dismissed the case, ruling that the customers of the iPhone, purchased applications directly from the developers, so they cannot sue for antitrust violations with respect to the 1977 U.S Supreme Court ruling. The writ of certiorari decided to reverse the dismissal of the case presiding that the customers purchased applications directly from Apple Inc., and not from the application developers.
Therefore, the appellant are allowed to file a case of antitrust under Illinois Brick against Apple Inc. The appellee argued that the plaintiffs in the case, lacked standing in oral arguments because the application developers fixed the price of the application themselves(Leswing, 2019). The appellee stuck to the point that the application developers pay to set up shop and sell their applications through the Apple stores under the contract.
The Supreme Court rejected the arguments presented by Apple's lawyer, and stated that Apple was arguing strenuously against a simple conclusion. In a 5-4 opinion, the judicial discretion held that customers of the iPhone who purchased the application through the Apple store were direct customers and had the right to sue Apple for creating a monopoly in the market and increasing the prices of the applications.
If we analyze the Apple vs Pepper case it can be divided into three parts. First of all the case was filed by appellant in general trail court the case was dismissed by the district court ruling that the customers purchase applications directly from developer so customers can not file case against Apple alleging antitrust violations according to 1997 U.S supreme Court ruling in Illinois Brick Co. Then the United States Court of Appeals reversed the dismissal of the case and stated that the consumers buy applications from apple not from the developers directly so the appellant have right to sue appellee against anti-trust violation. Then the case moved to United states Supreme Court for hearing and final decision.
The United States of Appeals hears challenges to general trial court's decisions as well as entertains the appeals from final decisions of federal administrative agencies. On January 12, 2017 the US court of Appeals reversed the general trial court's dismissal for lack of standing of an antitrust complaint against Apple Inc. On 2nd august 2016 the petition filed with United States Supreme Court and then on june 18, Supreme court agreed to hear the case of Apple vs Pepper. On November 26th the oral arguments took place and appellant and Appellee both presented their concerns. On May 13 2019, The Supreme court of United States has secured the decision confirmed by 5-4 vote. According to the final decision of the United States Supreme Court the consumers who directly purchased applications from the apple store had standing to file a cased against Apple for compensations because they were the direct buyers.
Read the above and answer these two questions.
- Do you agree with the Court's decision? Please explain.
- What are some of the major social implications of this decision?
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