Apple is facing the US Supreme Court to defend the commission it makes on iPhone app sales.
The company takes a 30% commission on every sale and is accused by a group of consumers of breaching anti-trust laws because there is no alternative place to buy an iPhone app.
Apple says it does not own or sell the apps but, as an Apple user, our experience is one that – we pick up our iPhone, log into the Apple store and purchase an App by paying Apple directly with the credit card information already supplied to Apple. It’s a simple, 1-step transaction.
The court must decide whether there is a case if there is no direct link between Apple and the app buyers. While app developers set their own prices, Apple collects the payments.
The U.S. Supreme Court appeared skeptical of Apple on Monday during oral argument in a case that could permit iPhone owners to move forward with an antitrust suit against the company for allegedly inflating the prices in its App Store.
That lawsuit could disrupt the electronic giant’s mobile software sales ecosystem, and potentially hit the company with hundreds of millions of dollars in penalties.
The Services category – which includes App Store commissions, alongside other media, content and services – is now Apple’s second biggest driver of revenue after iPhone sales and has been its fastest growing source of revenues.
As many of Apple’s device categories mature, services are vitally important as a means of driving incremental revenue after the device sale and also for tying users in to Apple’s ecosystem of devices, apps and services.
The Supreme Court will not settle the underlying antitrust issue. Rather, the justices are reviewing whether iPhone owners are entitled to bring such a case at all.
An adverse ruling against Apple in this case could have a broad impact, affecting other tech giants, like Facebook, Ebay, Amazon and Alphabet’s Google, which operate similar electronic marketplaces. The court is expected to issue a ruling by late June of 2019.
