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SCOTUSblog, Monday, November 26, 2018, round-up
Amy Howe Independent Contractor and Reporter
Posted Mon, November 19th, 2018 5:21 pm
Argument preview: Justices to consider whether antitrust lawsuit by iPhone users can go forward
When the justices return from their Thanksgiving vacation next week, they will hear oral argument in a would-be class action filed against the technology giant Apple by iPhone users. The iPhone users argue that Apple is violating federal antitrust laws by requiring them to buy apps only from Apple’s App Store, at inflated prices. But Apple counters that under the Supreme Court’s cases the iPhone users don’t have a case at all, because Apple is simply selling the apps to iPhone users at the prices that the app developers set. The implications of the case could be significant not only for Apple, which could face millions of dollars’ worth of damages if the case is allowed to go forward and the company is found liable, but also for other companies that operate similar “electronic marketplaces.”
The iPhone users filed their lawsuit in a federal trial court in California, but that court threw the case out. It pointed to a 1977 case called Illinois Brick Co. v. Illinois, in which the Supreme Court ruled that only consumers who are direct purchasers of a product can bring a lawsuit seeking the triple damages available for violations of federal antitrust laws. To put it another way, courts cannot award triple damages to plaintiffs who allege, not that they were overcharged, but that the defendant overcharged someone else, who then passed that charge on to the plaintiffs. In the trial court’s view, Apple’s case fit the scenario described in Illinois Brick to a T: App developers were paying Apple a 30 percent commission and then passing on the 30 percent mark-up to the iPhone users, which meant that the iPhone users didn’t have a case.
The iPhone users appealed to the U.S. Court of Appeals for the 9th Circuit, which reversed and allowed the lawsuit to go forward. It reasoned that Apple is a distributor that sells the apps to iPhone users directly through its App Store. Apple then went to the Supreme Court, which agreed to hear the case last spring.
In its brief on the merits, Apple contends that Illinois Brick and the decision that preceded it rest on two related ideas, both of which require a decision in Apple’s favor: The purchaser who pays an overcharge can bring a lawsuit to recover it, but someone to whom that purchaser passes on the overcharge cannot. Those ideas, Apple continues, are grounded in several different principles, including a desire to prevent duplicative recoveries and to avoid the complications that would result from having to allocate damages among a variety of plaintiffs.
....
This post was originally published at Howe on the Court.
Posted in Apple Inc. v. Pepper, Featured, Merits Cases
Recommended Citation: Amy Howe, Argument preview: Justices to consider whether antitrust lawsuit by iPhone users can go forward, SCOTUSblog (Nov. 19, 2018, 5:21 PM), http://www.scotusblog.com/2018/11/argument-preview-justices-to-consider-whether-antitrust-lawsuit-by-iphone-users-can-go-forward/
Posted Mon, November 19th, 2018 5:21 pm
Argument preview: Justices to consider whether antitrust lawsuit by iPhone users can go forward
When the justices return from their Thanksgiving vacation next week, they will hear oral argument in a would-be class action filed against the technology giant Apple by iPhone users. The iPhone users argue that Apple is violating federal antitrust laws by requiring them to buy apps only from Apple’s App Store, at inflated prices. But Apple counters that under the Supreme Court’s cases the iPhone users don’t have a case at all, because Apple is simply selling the apps to iPhone users at the prices that the app developers set. The implications of the case could be significant not only for Apple, which could face millions of dollars’ worth of damages if the case is allowed to go forward and the company is found liable, but also for other companies that operate similar “electronic marketplaces.”
The iPhone users filed their lawsuit in a federal trial court in California, but that court threw the case out. It pointed to a 1977 case called Illinois Brick Co. v. Illinois, in which the Supreme Court ruled that only consumers who are direct purchasers of a product can bring a lawsuit seeking the triple damages available for violations of federal antitrust laws. To put it another way, courts cannot award triple damages to plaintiffs who allege, not that they were overcharged, but that the defendant overcharged someone else, who then passed that charge on to the plaintiffs. In the trial court’s view, Apple’s case fit the scenario described in Illinois Brick to a T: App developers were paying Apple a 30 percent commission and then passing on the 30 percent mark-up to the iPhone users, which meant that the iPhone users didn’t have a case.
The iPhone users appealed to the U.S. Court of Appeals for the 9th Circuit, which reversed and allowed the lawsuit to go forward. It reasoned that Apple is a distributor that sells the apps to iPhone users directly through its App Store. Apple then went to the Supreme Court, which agreed to hear the case last spring.
In its brief on the merits, Apple contends that Illinois Brick and the decision that preceded it rest on two related ideas, both of which require a decision in Apple’s favor: The purchaser who pays an overcharge can bring a lawsuit to recover it, but someone to whom that purchaser passes on the overcharge cannot. Those ideas, Apple continues, are grounded in several different principles, including a desire to prevent duplicative recoveries and to avoid the complications that would result from having to allocate damages among a variety of plaintiffs.
....
This post was originally published at Howe on the Court.
Posted in Apple Inc. v. Pepper, Featured, Merits Cases
Recommended Citation: Amy Howe, Argument preview: Justices to consider whether antitrust lawsuit by iPhone users can go forward, SCOTUSblog (Nov. 19, 2018, 5:21 PM), http://www.scotusblog.com/2018/11/argument-preview-justices-to-consider-whether-antitrust-lawsuit-by-iphone-users-can-go-forward/