Apps

2011 monopoly abuse lawsuit comes back to haunt Apple, Inc.

A lawsuit filed against Apple, Inc. in 2011, seeking hundreds of millions of dollars in damages for monopoly abuse regarding Apple’s App Store, was revived recently. A US appeals court received the civil suit on January 12. Apple has been accused of creating a monopoly by making its App Store the only place to purchase iPhone applications. Lack of competition has thus pushed app prices higher.

An appellate court panel in San Francisco, California, reversed a lower court judge's decision to derail the suit on the grounds, iPhone owners were doing business with app creators and not Apple at the online shop, AFP reported.

“The panel reversed the dismissal for lack of statutory standing of an antitrust complaint alleging that Apple, Inc., monopolized and attempted to monopolize the market for iPhone apps,” said the US Court of Appeals for the Ninth Circuit in a written ruling. “The panel held that the plaintiffs were direct purchasers of iPhone apps from Apple, rather than the app developers, and therefore had standing to sue.”

The 2011 lawsuit was brought back to life by the ruling, which could pave the way for a potential massive payout by Apple or even an open market for apps to enter the App Store. After Apple launched the iPhone in 2007, the App Store was launched a year later, and became the only place for which applications could be purchased with approval from the California-based company.

Apple has been criticized for taking 30 percent of the price of what third-party developers sold in the App Store, which led to the case being brought forward. Apple defended itself in the motion that got the case dismissed, arguing that iPhone owners were doing business with app makers and therefore lacked the standing to sue Apple in the matter.

However, the appellate panel ruled that Apple "is a distributor of the iPhone apps, selling them directly to purchasers through its App Store." The ruling added: “Because Apple is a distributor, Plaintiffs have standing under Illinois Brick to sue Apple for allegedly monopolizing and attempting to monopolize the sale of iPhone apps.”