Apple share price up 1% after setback in antitrust lawsuit
The tech company's stock is up despite a ruling against the company by the US Supreme Court.
Apple share price is up after the US Supreme Court ruled that iPhone users can proceed with their lawsuit against the tech corporation for allegedly monopolising its iTunes App Store. The Supreme Court said customers can sue the company for perceived monopolistic behavior.
Why are iPhone customers suing Apple?
The ruling against Apple stems from a lawsuit brought by a group of iPhone users in 2011. The class action suit alleged that they could only download apps from the App Store and not the original source on their phones. As a result, they contended that Apple engaged in anticompetitive behavior.
The plaintiffs in the lawsuit also claimed that there was an ‘Apple tax’ where the corporation charged other companies 30% above a typical fee to sell their apps on the App Store. Developers then increased the prices of their apps, and the higher prices were passed on to the consumers.
Why did the Supreme Court rule against Apple?
The Supreme Court ruled 5-4 that the customers can sue Apple for perceived monopolistic behavior. In a surprise decision, conservative Justice, Brett Kavanaugh, sided with the liberal judges in the ruling. Kavanaugh wrote in the majority opinion of the court that if ‘retailers engage in unlawful anticompetitive conduct that harms consumers. That’s why we have antitrust law.’
‘Ever since Congress overwhelmingly passed and President Benjamin Harrison signed the Sherman Act in 1890, "protecting consumers from monopoly prices" has been "the central concern of antitrust" ', added Kavanaugh.
Apple’s lawsuit will continue the conversation about antitrust law in the US. Spotify made an argument that Apple was engaging in antitrust behavior when it alleged the music streaming app was charged the 'Apple tax' when Spotify was on the App Store.
What’s next for Apple?
Apple released a statement denying the allegations of anticompetitive behavior.
‘Today’s decision means plaintiffs can proceed with their case in district court. We’re confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric,’ said Apple.
‘Developers set the price they want to charge for their app and Apple has no role in that. The vast majority of apps on the App Store are free and Apple gets nothing from them. The only instance where Apple shares in revenue is if the developer chooses to sell digital services through the App Store,’ added Apple.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets