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May 17, 2019

Ken Vorrasi Comments on Apple’s Antitrust Defeat

Washington, D.C. partner Ken Vorrasi discussed the United States Supreme Court’s recent decision that allows iPhone users to bring antitrust claims against Apple as a result of the commissions Apple charges for apps when using their App Store. In writing the decision, Justice Kavanaugh noted that iPhone users pay Apple for apps in the App Store, and therefore qualify as direct purchasers, eligible to bring antitrust claims. The dissent argues that the majority was overturning precedent set in Illinois Brick v. Illinois, which barred indirect purchaser antitrust claims.

Ken explained to Reuters that as a result of the decision, even when there is ambiguity about consumers’ standing in such antitrust claims, their claims will not be dismissed due to Illinois Brick procedural issues. In the Reuters article, “More Antitrust Class Actions on the Way After Supreme Court’s Apple Ruling?”, Ken also pointed out that the ruling did not expressly address the merits of the class allegations, so antitrust class action plaintiffs will still have to demonstrate the legitimacy of their allegations.

In the Law360 article titled “Justices’ App Store Ruling Leaves Some In Tech On Edge,” Ken commented on new Justice Kavanaugh’s role in the decision, noting that, “Justice Kavanaugh has given standing to more consumers,” though the standing issue remains unresolved. Given the uncertainty around the issue, it appears that “...you’re going to have people testing the contours of this, particularly in the tech space.”

Ken also commented on the impact of the ruling for the mobile app industry in the Mobile Payments Today article, “Apple’s Supreme Court Defeat Could Signal Significant Changes In Mobile App Sales.” He again noted that the ruling did not address the merits of the claims and therefore does not necessarily indicate the final outcome, but the case does raise questions about the structure of the app market and if it is constructed in such a way that allows Apple to dominate. Ken commented, “[t]he theory in these cases is that Apple has some market power in its own App Store,” and so, “[t]he question is that really a market from an antitrust sense.”

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