Court Rules Apple Can Be Sued for Monopolizing iPhone App Market

A U.S. Appeals Court today ruled that App Store customers can move forward with a lawsuit claiming Apple created an illegal app monopoly because it did not allow users to purchase iPhone apps outside of the App Store, reports Reuters.

The decision reverses a 2013 ruling that dismissed the lawsuit, originally filed in 2012. The case, Pepper et al v. Apple Inc., alleges that by not letting users purchase apps from third-party sources, there was no price competition, leading to higher app prices.

When the lawsuit was originally filed, Apple requested that it be dismissed because developers, not Apple, set prices for App Store apps. Apple simply provides the platform developers use to sell apps to customers.

According to today's ruling, because iPhone users purchase the apps directly from Apple, they have the right to file a lawsuit against the company.

An attorney for the plaintiffs in the case told Reuters that the aim of the lawsuit is to allow people to shop for iPhone apps wherever they want, an outcome that's unlikely due to security implications.

But if the challenge ultimately succeeds, "the obvious solution is to compel Apple to let people shop for applications wherever they want, which would open the market and help lower prices," Mark C. Rifkin, an attorney with Wolf Haldenstein Adler Freeman & Herz representing the group of iPhone users, told Reuters in an interview. "The other alternative is for Apple to pay people damages for the higher than competitive prices they've had to pay historically because Apple has utilized its monopoly."

The Appeals Court ruling does not address the specific monopoly allegations levied at Apple and pertains only to whether or not Apple can be sued for this issue.