The U.S. Supreme Court dealt a blow to Apple on Monday that other big tech companies are no doubt watching closely. The justices voted 5-4 to allow a class action lawsuit to go forward, allowing consumers to try to prove Apple abuses its monopoly power in its App Store.
The decision could spell trouble for companies like Amazon and Facebook, which have been singled out by politicians who are concerned that Big Tech is engaging in anti-competitive behavior.
The news: The Supreme Court sided with consumers who brought a case against Apple, claiming the tech giant’s 30 percent take rate on apps sold in its App Store is an abuse of monopoly power that results in higher prices. Apple claimed that only app developers, not consumers, could bring the case. Justice Brett Kavanaugh said that kind of “line-drawing does not make a lot of sense, other than as a way to gerrymander Apple out of this and similar lawsuits,” in the opinion.
The backdrop: Big Tech has become a target of progressives running for president in 2020, elevating issues including antitrust to the main political stage. Sen. Elizabeth Warren is leading the pack with a bold proposal to break up big tech companies. Her plan would also prevent companies that make marketplaces and platforms (like Amazon and Apple) from selling their own goods or participating on those platforms.
Big picture: The SCOTUS decision could embolden elected officials who want to regulate tech. The ruling shows tech companies may have a hard time winning over the nation’s highest court if they come to legal blows with regulators over antitrust issues. Several lines in the opinion, like this, seem particularly prescient: “If a retailer has engaged in unlawful monopolistic conduct that has caused consumers to pay higher-than-competitive prices, it does not matter how the retailer structured its relationship with an upstream manufacturer or supplier.”
What’s next: The lawsuit is still in early stages and plaintiffs will have to prove that Apple engaged in anticompetitive behavior to succeed. If that happens, Apple’s exposure could be significant but there is a long road ahead. “At this early pleadings stage of the litigation, we do not assess the merits of the plaintiffs’ antitrust claims against Apple,” Kavanaugh wrote.
Read the full opinion below.
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