Apple is part of an app economy that will grow from $82 billion past year to $157 billion in 2022, according to projections from App Annie, a data and analytics company. Users who want to get around this restriction can "jailbreak" their device, but doing so voids their device's warranty with Apple. Consumers "pay the monopoly prices for apps directly to Apple through its App Store", the lawyers wrote in their Supreme Court brief. Judges could force it to change its pricing structure and Apple may face hundreds of millions in penalties to refund some of the commission it has taken in the past four years. "The App Store provides a safe, secure and trusted storefront for customers to find apps from across the globe that enrich and ease their lives".
A report published today by Reuters says that the Supreme Court is now finished hearing arguments from both sides. An appeals court reversed the dismissal in 2017, leading to the Supreme Court taking up the matter.
The company argues that because the app developers themselves set the price of apps in the App Store and not Apple, iPhone users are purchasing the apps from the developers directly.
iPhone apps are also only available through the App Store unless users "jailbreak" their phones, voiding the warranty.
If the justices permit the suit to go forward, a decision against Apple would nearly certainly be a blow to its business.
The case of Apple v. Pepper narrowly avoided being thrown out because existing antitrust laws may only apply to the App Store if consumers are considered direct purchasers.
A victory for Apple could severely restrict consumers' ability to sue over antitrust violations even though Congress envisioned such lawsuits "would form a central component of enforcement of the antitrust laws", warned 18 scholars of antitrust law in a Supreme Court filing.
Kavanaugh later suggested that the plaintiffs would have a more clear-cut right to sue if Apple bought the apps from the developers and sold them to consumers with its 30 percent commission. That 1977 ruling limited damages for anti-competitive conduct to those directly overcharged rather than indirect victims who paid an overcharge passed on by others. The company is emphasising services, so apps are critical for its future.
Apple said it is acting only as the agent for app developers who sell the apps to consumers through the App Store.
Apple has sought to dismiss the case without a jury trial saying that the device owners have no standing to sue, as iOS developers are the ones who choose to do business with Apple and set their own prices.
"When you're looking at the relationship between the consumer and Apple. there is only one step", she said.
Chief Justice John Roberts was the most supportive of Apple in his questioning.
Most states already allow downstream purchasers to collect damages, and the group says courts have been able to ensure that companies don't have to double-pay.
A ruling is expected in late spring.