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Apple Inc. v. Pepper

139 S. Ct. 1514 (2019)

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Apple Inc. v. Pepper

United States Supreme Court

139 S. Ct. 1514 (2019)

Facts

In 2008 Apple Inc. (defendant) launched its App Store, an electronic store where iPhone owners could purchase iPhone applications, also known as apps. Apps for the App Store were created by independent developers. The developers set the retail prices at which their apps would be sold through the App Store. Apple required all apps to have sale prices ending in $0.99 and received a 30 percent commission on each app sold. In 2011 four iPhone owners (collectively, the consumers) (plaintiffs) sued Apple under § 4 of the Clayton Act, alleging that Apple monopolized the market for the sale of apps and used its monopoly power to charge customers noncompetitive prices in violation of § 2 of the Sherman Act. Apple moved to dismiss the case, claiming that the consumers were not direct purchasers from Apple. Apple cited Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), in which the United States Supreme Court held that indirect purchasers may not sue a seller under antitrust laws. Apple argued that under Illinois Brick, a customer could only sue the company that set the retail price for the good or service. The United States Court of Appeals for the Ninth Circuit held that the consumers were direct purchasers of apps from Apple and therefore could sue Apple for its alleged antitrust violations. Apple appealed.

Rule of Law

Issue

Holding and Reasoning (Kavanaugh, J.)

Dissent (Gorsuch, J.)

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