Apple to Record Historic iOS Revenue, Faces Lawsuit Over iOS Apps

The US Court of Appeals for the Ninth Circuit [official website] ruled [opinion, PDF] Thursday that plaintiffs may sue Apple [corporate website] for violating antitrust regulations by forcing users to purchase apps exclusively through their app store. "Apple discourages iPhone owners from downloading unapproved apps, threatening to void iPhone warranties if they do so".

The case itself dates back to 2012, when users sued Apple for allegedly creating a monopoly in the app market by letting users only download apps from the App Store, and thus only allowing users to download apps that Apple had approved. The panel reinstated the lawsuit against Apple.

A three-judge panel of the 9th U.S Circuit Court of Appeals overturned a ruling of a federal judge in Oakland, who had dismissed the case. Apple's description of its role as that similar to the owner of a shopping mall that leases physical space to stores was "unconvincing", as third-party developers of iPhone apps do not have their own stores, he added.

According to Apple, this decision allows developers to "provide a complete, rich user experience upon installation".


The lawsuit claims that lack of competition and monopoly of App Store has led to increased prices for iPhone apps.

The case, Pepper et al v Apple, was sparked by Cupertino customers Robert Pepper, Stephen Schwartz, Edward Hayter and Eric Terrell, who were upset at Apple's stranglehold on software for their iThings. However if the challenge does succeed Apple will be forced to let people shop for applications wherever they want, which would open the market and help lower prices.

Well, good luck with trying to get Apple to understand that reasoning. A few years ago, the company was alleged to be stuck in a price-fixing conspiracy with book publishers, resulting in higher eBook prices. The goal here is obviously to get Apple to pay out and in this case, the suit will be pressing for "hundreds of millions" of U.S. dollars.

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