Law & the Courts

Kavanaugh Sides With Liberal Justices In Ruling iPhone Users Can Sue Apple Over App Prices

Supreme Court Associate Justice Brett M. Kavanaugh in Washington, D.C., December 3, 2018. (Jabin Botsford/Pool via Reuters )

Justice Brett Kavanaugh sided with his liberal colleagues on the Supreme Court Monday, writing for an ideologically unusual majority that iPhone users can sue Apple over the high app prices that result from its monopolistic control over the “the iPhone apps aftermarket.”

Kavanaugh and the court’s four liberal justices concurred with the Ninth Circuit’s contention that Apple, not app developers, controls the point of sale and, as a result, can be sued for exercising a monopoly.

“It is undisputed that the iPhone owners bought the apps directly from Apple,” Kavanaugh wrote, splitting with a district court that previously held the app developers responsible for pricing.

Kavanaugh took issue with Apple’s defense that it does not have a monopoly because it doesn’t set the retail price for individual apps, pointing out that the fee the company charges developers (30 percent of sales revenue plus $99 annually) significantly affects retail pricing.

“In the retail context, the price charged by a retailer to a consumer is often a result (at least in part) of the price charged by the manufacturer or supplier to the retailer, or of negotiations between the manufacturer or supplier and the retailer,” Kavanaugh wrote.

Justice Neil Gorsuch, writing for the Court’s conservative dissenters, argued that the majority relied on “convoluted pass-on theories” in which damages to the consumer that are actually inflicted by the app developers can be passed on to a third party, namely Apple.

“If the proximate cause line is no longer to be drawn at the first injured party, how far down the causal chain can a plaintiff be and still recoup damages?” he wrote.

The Court’s decision simply allows the original lawsuit, brought by a group of iPhone users, to proceed; it does not represent a ruling on the merits of the case.

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