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I wrote comments on this case here in the past, and not gonna rewrite them, so here is the TL;DR: This was not unexpected but precedent was on Apple's side. A

I wrote comments on this case here in the past, and not gonna rewrite them, so here is the TL;DR: This was not unexpected but precedent was on Apple's side. Apple was basically playing the "whoa, we don't sell apps, we just make an app store. They buy apps from the developers" card. This is technically true. In that situation, Illinois Brick/etc would normally say consumers cannot sue you, only app developers can. Most of the reasoning in those decisions is around how hard it is to calculate damages, etc. However, the court refused to buy it. The abstract they give is pretty easy to understand: "Second, Apple’s theory is not persuasive economically or legally. It would draw an arbitrary and unprincipled line among retailers based on their financial arrangements with their manufacturers or suppliers. And it would permit a consumer to sue a monopolistic retailer when the retailer set the retail price by marking up the price it had paid the manufacturer or supplier for the good or service but not when the manufacturer or supplier set the retail price and the retailer took a commission on each sale. Third, Apple’s theory would provide a roadmap for monopolistic retailers to structure transactions with manufacturers or suppliers so as to evade antitrust claims by consumers and thereby thwart effective antitrust enforcement. "

pentae 7y ago
> Apple was basically playing the "whoa, we don't sell apps, we just make an app store. They buy apps from the developers" card. This is technically true. How is it technically true? Apple collects the payment and takes a cut. Yes, the developer gets to set their prices, but I don't see this as any different to manufacturers of products setting their cost price for retailers, who then go and apply their markup to it.
- DannyBee 7y ago
  It's technically true because there is no real intermediary in apple's case (the "retailer" in your example). It's illusory. (this is also what the court found) Also keep in mind that various kinds of price fixing by manufacturers (IE forcing retailers to sell at a certain price) are also subject to antitrust arguments. It's simply no longer "per-se" illegal. For a long time, the precedent was that various forms of price fixing and price maintenance were illegal on their face. YOu didn't have to prove it hurt anyone, only that it existed. They are now subject to rule of reason analysis (basically, balancing of harms). The reason such lawsuits are uncommon is not because the price fixing is okay, but because it is incredibly expensive and time consuming to litigate for a very uncertain outcome :)
  - bradstewart 7y ago
    How is there no "real" intermediary? To purchase a product I go to an Apple owned-and-operated store, give Apple my credit card, and receive an item that's been packaged and signed by Apple tools from an Apple server.
    - jimktrains2 7y ago
      Yes, at the very least it's consignment. Apple plays a huge roll. It's not like Craigslist or the pennysaver where people place ads and everything else happens off platform.
    - DannyBee 7y ago
      I mean (as the court did) intermediary between apple and the consumer. Which you yourself have shown is illusory :) Apple's claim is in large part that the transaction is not between them and the consumer, but they are basically just off to the side somewhere. Again, in historical precedent like Illinois Brick, that is most certainly correct, and you can bet money the app store was structured in precisely the way it was to try to fall under that precedent. However, that illusion of being off to the side is clearly false from a practical perspective, as you have shown, and in the end, that is what lost them the case. Apple took the precedent to the logical extreme, and when you do that, you run the risk of the supreme court saying "yeah, actually, that goes against what we were trying to accomplish in the first place be". Which they did here: in the abstract, they actually say "yeah, we get it, but that that makes no sense in practice". (Hopefully lyft/uber/etc are paying attention, because they seem to expect the courts to let them take their "we're just app makers" argument to the logical extreme in a different legal context)
yxhuvud 7y ago
> Apple was basically playing the "whoa, we don't sell apps, we just make an app store. They buy apps from the developers" card. Well, one thing is certain, and that is that Spotify will be happy with this as it may end up making their competition against Apple Music a bit easier.
- briandear 7y ago
  Now all Spotify needs to do is pay artists as much as Apple does. Perhaps an antitrust case might be launched by artists against Spotify?
  - m-p-3 7y ago
    Probably, but that's their own fight. Spotify will do whatever is best for it, and the artists will do the same.
kevin_b_er 7y ago
> Apple was basically playing the "whoa, we don't sell apps, we just make an app store. They buy apps from the developers" card. > This is technically true. Technically? It doesn't look like it. Apple decides what is sold, how it is sold, IF it is sold, and what the thing sold may do. It will decide how to take payment, Apple takes payment and pays something else to the app developer after 30% and more. Apple decides when the developer gets money. Apple may retroactively cancel the sale within 90 days. Since the developer is paid within 60 days, it will do so. Apple is what is bills the customer and Apple(or one of Apple's many subsidiaries) is who pays the developer. Does the developer know who buys the things? No. They just give an infinite supply of widgets to Apple who sells them and gives the developer a cut.

pentae 7y ago

> Apple was basically playing the "whoa, we don't sell apps, we just make an app store. They buy apps from the developers" card. This is technically true. How is it technically true? Apple collects the payment and takes a cut. Yes, the developer gets to set their prices, but I don't see this as any different to manufacturers of products setting their cost price for retailers, who then go and apply their markup to it.

DannyBee 7y ago
It's technically true because there is no real intermediary in apple's case (the "retailer" in your example). It's illusory. (this is also what the court found) Also keep in mind that various kinds of price fixing by manufacturers (IE forcing retailers to sell at a certain price) are also subject to antitrust arguments. It's simply no longer "per-se" illegal. For a long time, the precedent was that various forms of price fixing and price maintenance were illegal on their face. YOu didn't have to prove it hurt anyone, only that it existed. They are now subject to rule of reason analysis (basically, balancing of harms). The reason such lawsuits are uncommon is not because the price fixing is okay, but because it is incredibly expensive and time consuming to litigate for a very uncertain outcome :)
- bradstewart 7y ago
  How is there no "real" intermediary? To purchase a product I go to an Apple owned-and-operated store, give Apple my credit card, and receive an item that's been packaged and signed by Apple tools from an Apple server.
  - jimktrains2 7y ago
    Yes, at the very least it's consignment. Apple plays a huge roll. It's not like Craigslist or the pennysaver where people place ads and everything else happens off platform.
  - DannyBee 7y ago
    I mean (as the court did) intermediary between apple and the consumer. Which you yourself have shown is illusory :) Apple's claim is in large part that the transaction is not between them and the consumer, but they are basically just off to the side somewhere. Again, in historical precedent like Illinois Brick, that is most certainly correct, and you can bet money the app store was structured in precisely the way it was to try to fall under that precedent. However, that illusion of being off to the side is clearly false from a practical perspective, as you have shown, and in the end, that is what lost them the case. Apple took the precedent to the logical extreme, and when you do that, you run the risk of the supreme court saying "yeah, actually, that goes against what we were trying to accomplish in the first place be". Which they did here: in the abstract, they actually say "yeah, we get it, but that that makes no sense in practice". (Hopefully lyft/uber/etc are paying attention, because they seem to expect the courts to let them take their "we're just app makers" argument to the logical extreme in a different legal context)

yxhuvud 7y ago

> Apple was basically playing the "whoa, we don't sell apps, we just make an app store. They buy apps from the developers" card. Well, one thing is certain, and that is that Spotify will be happy with this as it may end up making their competition against Apple Music a bit easier.

briandear 7y ago
Now all Spotify needs to do is pay artists as much as Apple does. Perhaps an antitrust case might be launched by artists against Spotify?
- m-p-3 7y ago
  Probably, but that's their own fight. Spotify will do whatever is best for it, and the artists will do the same.

kevin_b_er 7y ago

> Apple was basically playing the "whoa, we don't sell apps, we just make an app store. They buy apps from the developers" card. > This is technically true. Technically? It doesn't look like it. Apple decides what is sold, how it is sold, IF it is sold, and what the thing sold may do. It will decide how to take payment, Apple takes payment and pays something else to the app developer after 30% and more. Apple decides when the developer gets money. Apple may retroactively cancel the sale within 90 days. Since the developer is paid within 60 days, it will do so. Apple is what is bills the customer and Apple(or one of Apple's many subsidiaries) is who pays the developer. Does the developer know who buys the things? No. They just give an infinite supply of widgets to Apple who sells them and gives the developer a cut.