Apple charges app developers up to 30% commission just to sell their products through the app store, while barring them from selling their apps through other arenas and forcing every single developer’s price to end in 99 cents. Earlier this year, Spotify filed a complaint with European regulators claiming that Apple uses its (monopoly) power over the app store to hurt competitors. This is not a claim without merit, as the New York Times found that Apple has indeed manipulated the app store to remove or restrict screen time and parental control apps.
Which brings us to Apple Inc. v. Pepper et al, a class-action antitrust suit filed against Apple. The question of whether it could even move forward was hotly debated in the Supreme Court today—as four conservative justices, led by Neil Gorsuch, asserted that the 1977 decision, Illinois Brick Co. v. Illinois, established that only direct purchasers of products could bring antitrust lawsuits, and they argued that Apple is technically an intermediary when it comes to the app store, and thus they could not have an antitrust suit of this nature brought against them.
One conservative justice disagreed, and created a majority ruling with the four liberals on the court. Per Brett Kavanaugh:
The plaintiffs purchased apps directly from Apple and therefore are direct purchasers under Illinois Brick. At this early pleadings stage of the litigation, we do not assess the merits of the plaintiffs’ antitrust claims against Apple, nor do we consider any other defenses Apple might have. We merely hold that the Illinois Brick direct-purchaser rule does not bar these plaintiffs from suing Apple under the antitrust laws.
We see three main problems with Apple’s “who sets the price” theory. First, Apple’s theory contradicts statutory text and precedent.
Second, in addition to deviating from statutory text and precedent, Apple’s proposed rule is not persuasive economically or legally.
Third, if accepted, Apple’s theory would provide a roadmap for monopolistic retailers to structure transactions with manufacturers or suppliers so as to evade anti-trust claims by consumers and thereby thwart effective antitrust enforcement.
This is pretty mind-blowing. It’s rare for any antitrust lawsuits to make it past America’s historically extremely pro-corporate (and pro-racism) Supreme Court—let alone having Brett freaking Kavanaugh be the deciding vote in a ruling explicitly in favor of the little guy. Now, this doesn’t mean that Apple violated antitrust laws. This decision just allows the case to move forward through our judicial system, which should give you an idea how low the Supreme Court bar is when it comes to the optimism around breaking up monopolies.
It is clear as day that we live in an age of monopolization and oligopolization. It’s basically impossible to run a business without using Google and Facebook. Amazon has replaced all retail shopping. Apple runs its app store similar to how a cartel runs its drug trade. The tech companies are far too large, and Elizabeth Warren is right that they must be broken up. Brett Kavanaugh is still a horrible justice who is clearly gunning to overturn Roe v. Wade (liberal justice Stephen Breyer basically said as much in another ruling today where Kavanaugh was all too excited to overturn longstanding precedent), but in this one instance, he’s correct. The fact that Justice Dudebro found himself on the right side of this issue really tells you all you need to know about the rapidly deteriorating relationship between the titans of Silicon Valley and their increasingly dissatisfied customers and vendors.
Jacob Weindling is a staff writer for Paste politics. Follow him on Twitter at @Jakeweindling.