App Store’s walled garden could bring antitrust suit

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Apple pays $467k for doing business with blacklisted app developer
Does Apple have a monopoly on apps?
Photo: Apple

Apple may find itself at the center of a new antitrust lawsuit after the U.S. appeals court ruled that the App Store’s “walled garden” could be monopolizing the market for iOS apps.

What the 9th U.S. Circuit Court of Appeals ruling takes issue with is the fact that iOS apps can only be downloaded from the App Store, and not from elsewhere — thereby adding up to a potential monopoly.

This issue was first raised in 2012 as being potentially anticompetitive, but courts have previously sided with Apple.

Apple’s lawyers argue that users are buying apps directly from developers, and that Apple is doing the equivalent of renting them space to sell their goods.

Judge William A. Fletcher disagreed, however, and ruled that iPhone users are buying apps directly from Apple, which makes the legal challenge valid.

Should this case continue, and the challenge succeed, Apple may be compelled to let users shop for apps outside of the App Store — which critics of Apple’s current methods argue would open up the market and help lower prices.

“The other alternative is for Apple to pay people damages for the higher than competitive prices they’ve had to pay historically because Apple has utilized its monopoly,” Mark C. Rifkin, an attorney representing the group of iPhone users bringing the charge against Apple, told Reuters.

As with many other giant companies, Apple has been subject to various antitrust investigations — and speculation over potential antitrust investigations — over the years. These have included a class action antitrust lawsuit about whether Apple gained an unfairly monopolistic position by blocking competitors from putting their music on iPods, an antitrust investigation over e-book price fixing in 2013.

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