Apple v. Pepper Case Brief
Apple v. Pepper Case Brief
The case that I will be doing is between Apple, Inc. and Robert Pepper. This lawsuit came from Apple’s handling of their apps and the sale of them on iPhone devices. In 2007, Apple released its first iPhone and it meant that Apple controls everything that goes on in their app store. Most apps that are on the app store however are developed by third parties. Every single app store sale that is made by a third-party developer, Apple receives about 30% of the sale price (Barthold).
In 2011, there were four plaintiffs who decided to file an antitrust class action complaint against Apple Inc. The reasoning for this was because the plaintiff said that Apple was alleging monopolization on the iPhone App market. At first, the complaint that was made was originally dismissed on technical grounds. In addition, there has been multiple other times in the past where people filed the same suits against Apple for antitrust actions. In 2013 however, a group of plaintiffs provided a number of facts in order for the lawsuit to advance. The biggest fact that constantly repeated itself was that the app developers had purchased their own apps from the store and these purchases all involved Apple collecting the whole entire purchase price and later paying the developers after the sale. Apple later filed another motion to dismiss the lawsuit having to do with the lack of statutory standing to sue (Forbes).
There was another case which had similar elements that were used in this previous Apple case which was Illinois Brick Co. v. Illinois. This case also went to the Supreme Court level based on antitrust. The Antitrust Law establishes that the indirect purchases of products, goods, or services from a supply chain are not allowed to seek an antitrust case committed by the service provider. What happened was that the United States government decided to file civil and criminal charges against eleven manufactures of concrete and brick in Chicago. The claim that they were alleging was that the company was price fixing. The result of this case was a settlement that was made outside the courts between this brick and concrete company and the government, later creating to the antitrust law being established (Apple vs. Pepper).
In another similar case in 2013 suing Apple for antitrust once again, the conclusion was that if the plaintiffs purchased the app directly from the actual app developers, they are unable to sue Apple, but if they bought the apps from Apple then they are able to sue (Apple vs. Pepper).
Another problem or issue that is coming up is that app developers are beginning to think that apple is inflating the prices for developing apps so that Apple Inc. can generate more of a profit through these apps. In 1977 as mentioned before, the supreme court created the Illinois Brick Doctrine which says that “indirect purchasers” cannot sue a company for antitrust damages or issues. Whether or not Apple is a monopoly on the app marketplace, it is their marketplace and they have control over what happens over their product (Barthold).
The supreme court grants certiorari for a few cases per year and the reasoning behind the purpose of choosing this case to me is because there has been issues in the past over Apple being a monopoly. It seems to me that the supreme court is trying to end all the controversy and court cases coming up through them with antitrust issues, so they are taking this case into account heavily. If this case rules in Peppers favor, then it seems as though Apple could be in a lot of trouble financially as being seen as a monopoly. I do not ever see it going Peppers way, but at the end of the day it would be very interesting to see what would happen.
Initially, when the case was brought up to the court it was ruled in favor of Apple, they said that the plaintiff did not have enough of a legal standing to bring the case because they were not charged the commission (Apple Inc. vs. Pepper).
My personal belief on this case is that Apple should never be guilty over this. If app developers decide to put their app on the iOS app store then they should not be able to sue because Apple is doing nothing wrong. They should know that Apple takes a 30 percent revenue cut from every app for being put on their store. Apple is being generous in my opinion giving them a 30 percent cut for a few reasons. For example, the number one downloaded app on the iOS app store is Minecraft, created by Mojang. This app has over 1.3 million downloads and sells for $6.99. This generates a profit of about $9.1 million, with apple taking about $2.7 million and leaving Mojang with $6.4 million (Mojang). Minecraft is not complaining to Apple however because it has generated over $6 million. The companies that are complaining towards Apple and are threatening to sue are the ones whose apps are not successful.
In conclusion, Apple was originally a company that was founded by Steve Jobs and Steve Wozniak in 1976. What started as a small computer manufacturing and developing team in a garage turned into one of the most powerful and well-known brands globally. There has been times where Apple in the beginning had almost stopped what they were doing due to a lack of a future goal and how to achieve it. Now that they are on top, I do not believe that individuals have the right to sue this corporation due to their success and having a dominating market in which everyone wants to be a part of. I do not believe that Apple fails to uphold the Antitrust law and should not lose this court case, but the decision is not up to me, but I am very interested and intrigued to see what the ruling on this court will be.
Apple Inc. v. Pepper.” Wikipedia, Wikimedia Foundation, 25 Oct. 2018, en.wikipedia.org/wiki/Apple_Inc._v._Pepper.
Barthold, Corbin. “U.S. Solicitor General Rightly Supports SCOTUS Grant of ‘Apple v. Pepper’ Antitrust Case.” Forbes, Forbes Magazine, 22 May 2018, www.forbes.com/sites/wlf/2018/05/22/u-s-solicitor-general-rightly-supports-scotus-grant-of-apple-v-pepper-antitrust-case/#3ec121d7379a.
Robertson, Adi. “What Happens If Apple Loses Its Supreme Court App Store Antitrust Appeal?” The Verge, The Verge, 20 June 2018, www.theverge.com/2018/6/20/17479480/supreme-court-apple-vs-pepper-antitrust-lawsuit-standing-explainer.
Mojang. “?Minecraft.” App Store, Publisher: Disney Publishing Worldwide, 17 Nov. 2011, itunes.apple.com/us/app/minecraft/id479516143?mt=8.
“Apple vs Pepper: App Store Monopoly Case Heads to the Supreme Court | TheINQUIRER.” Http://Www.theinquirer.net, 19 June 2018, www.theinquirer.net/inquirer/news/3034410/apple-vs-pepper-seven-year-old-antitrust-case-heads-to-the-supreme-court.