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The issue here is very different than people seem to think. The supreme court granted cert on one question: "Whether consumers may sue for antitrust damages a
by DannyBee 8y ago
The issue here is very different than people seem to think.
The supreme court granted cert on one question:
"Whether consumers may sue for antitrust
damages anyone who delivers goods to them,
even where they seek damages based on prices
set by third parties who would be the
immediate victims of the alleged offense."
(This is apple's statement of the question, and thus necessarily is tilted in how they see things)
The petition summary has more details and is quite short:
http://www.scotusblog.com/wp-content/uploads/2017/10/17-204-petition.pdf http://www.scotusblog.com/wp-content/uploads/2017/10/17-204-...
There is a circuit split on this issue, which is likely why the supreme court took it. It's mostly about indirect purchasers vs direct purchasers. Indirect purchasers cannot sue, only direct purchasers can, mainly because it's really hard to apportion damages properly.
The previous major case on distribution monopolization was an eight circuit case about ticketmaster, Campos v. Ticketmaster Corp, https://caselaw.findlaw.com/us-8th-circuit/1097030.html https://caselaw.findlaw.com/us-8th-circuit/1097030.html. Section II of that opinion is a fairly readable rundown of the issue of direct vs indirect purchasing and who gets to sue.
Ticketmaster held that people paying greater distribution fees to ticketmaster as a result of their monopoly could not sue, as they are indirect purchasers.
The ninth circuit, in the apple case, held differently, holding that apple was selling directly to consumers, regardless of whether app developers got to set price.
The opinion, which is also quite readable, is here:
https://www.leagle.com/decision/infco20170112133 https://www.leagle.com/decision/infco20170112133.
Again, i'd just read the part starting with "plaintiffs are direct purchasers"
Personally, i think the dissent in ticketmaster (and the ninth circuit) got it right. This is also what the ninth circuit explicitly says.
In these models, only the people at the bottom make sense as the people to sue, as when you control distribution carefully like this, they are the only injured party.
- dcow 8y agoI think it would be interesting if the court looked at who signs the software being purchased, from a digital security and ownership perspective. When you purchase an app from the App Store you are purchasing Apple's software. It's no longer signed by the original developer. If the court held Apple to the model they've deployed for their ecosystem, that could have interesting ramifications on the means by which Apple locks its platform down.
- mark212 8y agotrue, but in antitrust terms the developer is still setting the price. Not Apple. It's the developer who makes it a free / freemium / $0.99 / $999.99 app. That pricing decision seems to be responsible for the circuit split.
- mark212 8y ago> only the people at the bottom make sense as the people > to sue, as when you control distribution carefully like > this, they are the only injured party. Here's the case for manufacturer's standing: the manufacturer (app developer) might argue that the distributor's (Apple's) monopoly on distribution hurts them just as much if not more since the inflated price means they're selling less quantity than they would in a non-monopolized marketplace. Even though they technically set the price, having to pay Apple's rake on the App Store means that they must inflate their prices by at least 30% to bring them back to the price they'd otherwise sell at in the absence of the distributor. In any event, I thought the case was a dog on the merits. How can Apple possibly be a monopolist, despite their 100% share of application sales on iOS, since the relevant market is for app-capable cell phones -- not iOS. Plenty of folks, the majority in fact, vote with their dollars by buying Android devices.
- fauigerzigerk 8y agoThe irony is that Google is able to take the exact same 30% cut in spite of allowing side-loading and third party app stores. So I think the class action itself would be difficult to win even if it were allowed to go ahead. Apple could argue pretty convincingly that their app store "monopoly" does not drive up app prices.
- DannyBee 8y agoApp developers definitely have standing here (and the 9th circuit opinion says so). They just have a much harder time showing injury (and thus standing) because they are not paying the fees :) Instead, they have to make the indirect argument you do, and it's unclear what the harm is. They are not paying 30% more, the consumer is. There's no data to suggest they are selling less. Who is really injured? The same issue arose in ticketmaster - outside of consumers, everyone else has a really hard time showing injury. Meanwhile, the consumers, who directly pay the monopoly fee, are directly injured.
- ericd 8y agoThey could always drop their price to the amount they could charge without the 30%, and get supply/demand price sensitivity curves. If a bunch of apps did this, you could get statistically significant data. A law firm could easily pay a number of app makers to try this out in exchange for the data, and then make a huge class action out of this. I think the big challenge is that there are a number of confounding factors, like Apple's ranking algorithms.
- patrickg_zill 8y agoQuestion: if Apple sells their own apps on the store also, does that remove the direct / indirect purchase issue?