Briefcase

Sherman Antitrust Act: Apple Inc. v Pepper

Host: Dean Leonard Baynes

The Sherman Antitrust Act, passed more than a century ago, still holds weight in the digital age. Dean Leonard Baynes, with the University of Houston Law Center, explains how in Apple Inc. v Pepper, the Supreme Court allowed iPhone users to directly sue Apple over alleged excessive app store pricing.

“The case questioned whether consumers had standing to bring this suit directly against Apple or the developers. Apple sells its apps directly to iPhone users through its app store. The independent developers create the apps, set a retail price, and pay Apple a $99 annual membership fee and a 30% commission on every app sale. 

Apple argued that consumers should not be eligible to sue because developers set the price charged for the app. The court found that iPhone users purchase the apps directly from Apple, the alleged antitrust violator and pay the overcharge directly to them. When iPhone owners want to purchase an app, they can only buy it from Apple’s app store. Otherwise, they legally cannot secure it.

Since 1890, the Sherman Act protects consumers from monopoly prices, which is one of the central concerns of antitrust law.”

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