Nixon Peabody LLP

  • People
  • Capabilities
  • Insights
  • About

Trending Topics

    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni

    Practices

    View All

    • Affordable Housing
    • Community Development Finance
    • Corporate & Finance
    • Cybersecurity & Privacy
    • Environmental
    • Franchising & Distribution
    • Government Investigations & White Collar Defense
    • Healthcare
    • Intellectual Property
    • International Services
    • Labor & Employment
    • Litigation
    • Private Wealth & Advisory
    • Project Finance
    • Public Finance
    • Real Estate
    • Regulatory & Government Relations

    Industries

    View All

    • Cannabis
    • Consumer
    • Energy
    • Entertainment
    • Financial Services
    • Healthcare
    • Higher Education
    • Infrastructure
    • Manufacturing
    • Non Profit
    • Real Estate
    • Technology

    Value-Added Services

    View All

    • Alternative Fee Arrangements

      Developing innovative pricing structures and alternative fee agreement models that deliver additional value for our clients.

    • Continuing Education

      Advancing professional knowledge and offering credits for attorneys, staff and other professionals.

    • Crisis Advisory

      Helping clients respond correctly when a crisis occurs.

    • DEI Strategic Services

      Providing our clients with legal, strategic, and practical advice to make transformational changes in their organizations.

    • eDiscovery

      Leveraging law and technology to deliver sound solutions.

    • Global Services

      Delivering seamless service through partnerships across the globe.

    • Innovation

      Leveraging leading-edge technology to guide change and create seamless, collaborative experiences for clients and attorneys.

    • IPED

      Industry-leading conferences focused on affordable housing, tax credits, and more.

    • Legal Project Management

      Providing actionable information to support strategic decision-making.

    • Legally Green

      Teaming with clients to advance sustainable projects, mitigate the effects of climate change, and protect our planet.

    • Nixon Peabody Trust Company

      Offering a range of investment management and fiduciary services.

    • NP Capital Connector

      Bringing together companies and investors for tomorrow’s new deals.

    • NP Second Opinion

      Offering fresh insights on cases that are delayed, over budget, or off-target from the desired resolution.

    • NP Trial

      Courtroom-ready lawyers who can resolve disputes early on clients’ terms or prevail at trial before a judge or jury.

    • Social Impact

      Creating positive impact in our communities through increasing equity, access, and opportunity.

    1. Home
    2. Insights
    3. Alerts
    4. Supreme Court at the Illinois Brick wall: iPhone App Store customers can sue Apple for violation of federal antitrust lawAlerts

    Alert / Antitrust Alert

    Supreme Court at the Illinois Brick wall: iPhone App Store customers can sue Apple for violation of federal antitrust law

    May 14, 2019

    Share

    By Gordon Lang, Ronaldo Rauseo-Ricupero and Brian Whittaker

    Yesterday, the Supreme Court paved the way for a potential class action by iPhone App Store customers against Apple for damages for alleged monopolization of the aftermarket for iPhone applications. The decision is important for the software industry, electronic marketplaces, and for various alternative sales arrangements.

    In a much-anticipated opinion, the U.S. Supreme Court yesterday ruled in a 5-4 decision that iPhone App Store customers could proceed against Apple on their claim that Apple monopolized the market for aftermarket iPhone apps by requiring developers to sell apps to consumers only through the App Store and to allow a 30% commission to Apple on those sales. Apple Inc. v. Robert Pepper et al.

    Apple argued that the consumers were barred from seeking damages under the longstanding principle of federal antitrust law—that “indirect purchasers” cannot recover damages for antitrust violations—set forth in Illinois Brick Co. v. Illinois, 431 U. S. 720 (1977). Apple contended that the plaintiffs were indirect purchasers because the developers, not Apple, set the prices for the apps, and Apple was a mere intermediary. Furthermore, it argued that any alleged damaged claim relied on the theory that developers had “passed on” their commission costs to them—and such passing on claims had been barred by Illinois Brick. The United States Department of Justice supported Apple.

    Writing for the majority, Trump-appointee Justice Kavanaugh, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan, held for the iPhone owners: “It is undisputed that the iPhone owners bought the apps directly from Apple. Therefore, under Illinois Brick, the iPhone owners were direct purchasers who may sue Apple for alleged monopolization.” Apple was proposing “arbitrary and unprincipled” line-drawing that would “gerrymander Apple out of this and similar lawsuits” and “furnish monopolistic retailers with a how-to guide for evasion of the antitrust laws.”

    Justice Gorsuch, joined by Chief Justice Roberts and Justices Thomas and Alito dissented, arguing that the majority’s decision departed from Illinois Brick and would allow suits for “convoluted ‘pass on’ theories of damages.”

    The Court’s decision could well have far-reaching consequences—certainly that was the fear of the U.S. Chamber of Commerce and others who supported Apple at the Court. In refusing to draw a distinction between traditional retail purchases and purchases made through a commission-based e-commerce model, the decision could engender consumer claims based on sales through other electronic marketplaces and alternative sales models. The Supreme Court did not decide whether or not Apple committed an antitrust violation, but e-commerce and other businesses may want to keep an eye open.

    Practices

    LitigationAntitrust

    Insights And Happenings

    • Alert

      Antitrust goes social: FTC, states sue Facebook

      Dec 15, 2020
    • Press Release

      Hispanic National Bar Association Names Nixon Peabody’s Ronaldo Rauseo-Ricupero to “Top Lawyers Under 40”

      March 3, 2020
    • Alert

      On second thought: Post abandons deal after rare FTC challenge

      Jan 21, 2020

    Subscribe to stay informed of the latest legal news, alerts, and business trends.Subscribe

    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni
    • © 2023 Nixon Peabody. All rights reserved
    • Privacy Policy
    • Terms of Use
    • Statement of Client Rights
    • Supplier Diversity Program
    • Nixon Peabody International LLC
    • PAL