A majority of the the U.S. Supreme Court held recently that consumers that purchase Apps from Apple’s App store are direct purchasers able to pursue a proposed antitrust class action under federal law. The majority rejected Apple Inc.’s contention that the consumers are “indirect purchasers” barred from pursuing federal antitrust damages under the high court’s 1977 ruling in Illinois Brick. Instead, the majority found the App Store buyers are direct purchasers from Apple, sidestepping calls from 31 states to overturn the landmark Illinois Brick ruling, which has generally limited federal antitrust claims under the Sherman and Clayton acts to “direct” purchasers of the price-fixed product or service, not “indirect” buyers further down the chain.

“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,” Justice Brett M. Kavanaugh said for the 5-4 majority, joined by the court’s liberal members.

The technology giant has been defending the case since 2011, when consumers first alleged that it monopolizes the market by forcing developers to sell only on its platform, while it collects a 30% commission. A district court granted Apple’s motion to dismiss the case in 2013 under Illinois Brick, but the Ninth Circuit revived it in 2017. The Ninth Circuit held that because Apple acts as a distributor of the apps and customers purchase apps directly from Apple, Illinois Brick did not apply.

This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.

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