Apple sued for overpricing iPhone apps

iOS 11 iPhone X

Apple is in trouble again, this time over how much it charges (or overcharges) for iPhone apps. It’s currently making its arguments in the US Supreme Court, but it looks like the court is going to rule against it.

The case actually began in 2011 and was revived again last year. A man named Robert Pepper and 3 other users sued Apple for creating a walled garden economy. The App Store is the only place to buy apps on an iPhone, ensuring a monopoly for Apple. The company also takes a 30% cut of a developer’s revenue.

Apple Vs iPhone Users

Pepper thinks that Apple has built a system in which no one else is allowed to compete and the customer is forced to pay for that 30% commission. Gizmodo reports that the lawsuit has been traveling around the lower courts without a resolution for years and it’s now up to the Supreme Court to decide whether Pepper can even sue Apple.

This is where things get complicated. From Apple’s point of view, it’s just a middleman which connects app developers to users. It doesn’t make most of the applications, it just collects the money for them, gives 70% to developers, and keeps the rest for itself. From the lower court’s point of view, consumers are directly buying apps which Apple is selling.

Also Read: Apple forced to cut iPhone XS, iPhone XS Max, iPhone XR orders after weak sales

The Supreme Court has to decide which interpretation is correct. If Apple is the seller, customers can sue it since they purchased the app from them. If Apple is the middleman, then users can’t sue it since they’re actually buying apps from a developer. All this is complicated by the fact that the iPhone maker is the one who decides app prices and commissions.

Apple is now hard at work trying to make the Supreme Court see things from its perspective. Things could go either way, but it seems the judges are leaning against the brand. The final decision will be announced in June 2019, so there are plenty of arguments to be made on both sides ahead.