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Apple faces App Store damages claims

Apple faces App Store damages claims


The US Supreme Court ruled that the case could proceed, potentially paving the way for damages payouts to millions of App Store customers.

The claimants allege that consumers pay more for apps bought from the App Store because it is the only way that iPhone users can download them. To put an app on the App Store, developers must pay Apple a $99 annual membership fee plus 30 per cent commission on every app sale.

The case was brought by four iPhone owners, who sued Apple alleging that the company had unlawfully monopolised the aftermarket for iPhone apps. Apple argued that it could not be sued because iPhone owners do not buy apps directly from Apple, but the Supreme Court disagreed, splitting 5-4.

Apple shares closed down by $11.46, or 5.8 per cent, to $185.72 in New York last night, valuing the company at $854.5 billion.

The shares were also under pressure from an escalation in US-China trade tensions, because Apple ships in iPhones to the United States that are assembled in China.

Apple is rapidly growing its software services business, which includes the App Store, as unit sales of iPhones decline. Sensor Tower, a San Francisco-based market research firm, estimates that iPhone and iPad users spent $46.6 billion on apps last year.

The US Supreme Court ruled that the case could proceed, potentially paving the way for damages payouts to millions of App Store customers.

The claimants allege that consumers pay more for apps bought from the App Store because it is the only way that iPhone users can download them. To put an app on the App Store, developers must pay Apple a $99 annual membership fee plus 30 per cent commission on every app sale.

The case was brought by four iPhone owners, who sued Apple alleging that the company had unlawfully monopolised the aftermarket for iPhone apps. Apple argued that it could not be sued because iPhone owners do not buy apps directly from Apple, but the Supreme Court disagreed, splitting 5-4.

Apple shares closed down by $11.46, or 5.8 per cent, to $185.72 in New York last night, valuing the company at $854.5 billion.

The shares were also under pressure from an escalation in US-China trade tensions, because Apple ships in iPhones to the United States that are assembled in China.

Apple is rapidly growing its software services business, which includes the App Store, as unit sales of iPhones decline. Sensor Tower, a San Francisco-based market research firm, estimates that iPhone and iPad users spent $46.6 billion on apps last year.



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