Not a Lexis Advance subscriber? Try it out for free.

Apple Inc. v. Pepper

Supreme Court of the United States

November 26, 2018, Argued; May 13, 2019, Decided

No. 17-204.

Opinion

Justice Kavanaugh delivered the opinion of the Court.

In 2007, Apple started selling iPhones. The next year, Apple launched the retail App Store, an electronic store where iPhone owners can purchase iPhone applications from Apple. Those “apps” enable iPhone owners to send messages, take photos, watch videos, buy clothes, order food, arrange transportation, purchase concert tickets, donate to charities, and the list goes on. “There’s an app for that” has become part of the 21st-century American lexicon.

In this case, however, several consumers contend that Apple charges too much for apps. The consumers argue, in particular, that Apple has monopolized the retail market for the sale of apps and has unlawfully used its monopolistic power to charge consumers higher-than-competitive prices.

 [*1519]  A claim that a monopolistic retailer (here, Apple) has used its monopoly to overcharge consumers is a classic antitrust claim. But Apple asserts that the consumer-plaintiffs in this case may not sue Apple because they supposedly were not “direct purchasers” from Apple under our decision in Illinois Brick Co. v. Illinois, 431 U. S. 720, 745-746, 97 S. Ct. 2061, 52 L. Ed. 2d 707 (1977). We disagree. The plaintiffs purchased apps directly from Apple and therefore are direct purchasers under  [***6] Illinois Brick. At this early pleadings stage of the litigation, we do not assess the merits of the plaintiffs’ antitrust claims against Apple, nor do we consider any other defenses Apple might have. We merely hold that the lllinois Brick direct-purchaser rule does not bar these plaintiffs from suing Apple under the antitrust laws. We affirm the  [**807]  judgment of the U. S. Court of Appeals for the Ninth Circuit.

In 2007, Apple began selling iPhones. In July 2008, Apple started the App Store. The App Store now contains about 2 million apps that iPhone owners can download. By contract and through technological limitations, the App Store is the only place where iPhone owners may lawfully buy apps.

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

139 S. Ct. 1514 *; 203 L. Ed. 2d 802 **; 2019 U.S. LEXIS 3397 ***; 2019-1 Trade Cas. (CCH) P80,762; 27 Fla. L. Weekly Fed. S 796; 2019 WL 2078087

APPLE INC., Petitioner v. ROBERT PEPPER, et al.

Notice: The LEXIS pagination of this document is subject to change pending release of the final published version.

Subsequent History: Remanded by, Motion denied by Pepper v. Apple Inc. (In re Apple iPhone Antitrust Litig.), 2019 U.S. App. LEXIS 21057 (9th Cir. Cal., July 16, 2019)

Prior History:  [***1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Pepper v. Apple Inc. (In re Apple iPhone Antitrust Litig.), 846 F.3d 313, 2017 U.S. App. LEXIS 577 (9th Cir. Cal., Jan. 12, 2017)

Disposition: Affirmed.

CORE TERMS

consumers, retailer, antitrust, monopolistic, developers, iPhone, manufacturer, overcharge, damages, purchasers, prices, violator, supplier, chain, monopoly, anti trust law, pass-on, suits, higher-than-competitive, Shoe, proximate cause, markup, complicated, contractors, customers, upstream, buy, statutory text, intermediary, monopolize

Antitrust & Trade Law, Sherman Act, Scope, Monopolization Offenses, Clayton Act, Claims, Scope, Private Actions, Purchasers, Direct Purchasers, Indirect Purchasers