Apple must face claims of monopoly in iPhone app market

A court ruled that Apple has to face charges as app 'distributor'

An appeals court has ruled that Apple must face antitrust charges in a US lawsuit that alleges that the company monopolized the market for iPhone apps.

The U.S. Court for Appeals for the Ninth Circuit reversed Thursday a decision by a lower court and ruled that the app buyers filing the lawsuit are direct purchasers of iPhone apps from Apple, rather than from app developers, and hence have standing to sue.

Apple was a distributor of iPhone apps, selling them directly to buyers through its App Store, according to the court.

The proposed class-action lawsuit started in 2011 with the complaint changing several times.

The purchasers object to the 30 percent "surcharge" that they pay to Apple. The company collects 30 percent of the revenue of third-party apps on its store, with the balance going to the developer, in a closed system in which Apple controls which apps can run on an iPhone, according to court records.

Apple had argued that it does not sell apps but “software distribution services to developers,” and hence cannot simultaneously be a distributor of apps to app purchasers, Circuit Judge William Fletcher wrote for the unanimous panel.

Apple’s description of its role as that similar to the owner of a shopping mall that leases physical space to stores was “unconvincing,” as third-party developers of iPhone apps do not have their own stores, he added.

The courts have yet to address the complaints of the app purchasers, who allege that Apple prohibits app developers from selling iPhone apps through channels other than the App Store, threatening to cut off sales by any developer who violates this rule, according to court records.

Apple is also said to discourage iPhone owners from downloading unapproved apps, threatening to make iPhone warranties void if they do so.

Apple did not immediately comment on the decision.

The suit covers purchases of apps from 2007 to 2013 but Bloomberg quoted Mark Rifkin, a lawyer for the plaintiffs, as saying that he may try to extend the proposed class action suit to include purchasers who have bought apps for the iPhone up to the present.

Apple is being sued for damages and the court is being asked to order the company to change its app store rules.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?