San Francisco - Apple must face consumer claims that it
tried to monopolise the market for iPhone apps from 2007 to 2013 in a
class-action lawsuit seeking hundreds of millions of dollars in damages.
A federal appeals court in San Francisco revived the
proposed class-action lawsuit Thursday after a lower-court judge dismissed it.
The three-judge panel concluded the judge erred in finding that the consumers
lacked standing to sue as “direct purchasers” of apps.
An Apple spokeswoman declined to comment on the court’s
decision.
Consumers alleged in a complaint originally filed in 2011
that Apple violated U.S. antitrust law by requiring iPhone apps to be sold at
Apple’s App Store and prohibiting third-party app developers from selling
the software outside of it. Apple requires iPhone software developers to turn
over 30 percent of what they charge for an app, increasing prices and excluding
competitors from the iPhone “aftermarket” of apps, according to the suit.
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Mark Rifkin, a lawyer for the plaintiffs, said Thursday
that millions of consumers should be able to recover most of Apple’s 30 percent
take from app store sales. He said that while the case hasn’t won class-action
status yet, he may seek to expand the scope of the class to include everyone
who has bought apps for iPhones to the present. Based on a provision in federal
law that triples the damages awarded in antitrust cases, he estimated Apple’s
exposure could reach hundreds of millions of dollars.
Apple said in its defense that “it does not sell apps but
rather sells software distribution services to developers,” according to the
court’s decision.
Apple cited a 1977 Supreme Court ruling that bars
consumers from recovering damages from a company if it doesn’t directly sell
its products to consumers. The appeals panel said Thursday the lower court
erred in accepting this argument since iPhone users are direct consumers of
content in the App store.
“Apple’s analogy is unconvincing,” the court said. “In
the case before us, third-party developers of iPhone apps do not have their own
stores.”
BLOOMBERG