Digital Gabe
Cutting Edge Commentary On All Things Media

SCOTUS Hears Apple App Store Case

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On Monday the Supreme Court heard arguments about whether or not a lawsuit could proceed against Apple over allegations that it’s running a software monopoly through its App Store.  For some background Apple forces all app developers who want to sell iOS apps to go through their App Store.  Then Apple takes a 30% commission of all revenue generated from app installs.  Since there’s no way to get the apps on your iPhone without going through the App Store, consumer groups are accusing Apple of running a monopoly and unfairly forcing up the prices we all pay for purchased iOS apps.

Apple’s defense of the App Store is pretty simple.  With many other Android-based phones on the market you don’t have to buy an iPhone.  So consumers are making a free decision earlier in the supply chain, knowing if they choose an iPhone they’ll be getting their apps through the App Store.  In their questioning the Justices appeared to be split on the validity of the case, so there’s no telling which way they’ll rule.

Playing out the hypothetical for a minute, if the SCOTUS does allow the lawsuit to go forward and if the plaintiffs win, Apple will be faced with some uneasy choices.  Would they allow competing app stores to offer iOS versions of apps?  Would they drop the forced 30% fee for App Store purchases?  Or would they come up with some other way to thread the legal needle?  We shall see . . .

 

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