Consumers Win Over Apple at Supreme Court

loss for Apple. The Court ruled the consumers can go ahead with an antitrust lawsuit that accuses Apple of using its market dominance to artificially inflate prices at its app store. Joining me is the attorney who represents the consumers and the class action. The winning attorney, as you mentioned, Mark Riskin, managing partner at Wolf Haldenstein. Mark. At the end of last month, we were here talking about a Supreme Court decision against class arbitration. This was a huge win for consumers.

What made the difference, Well, June, first, it's a pleasure to be here. Thank you for having me. I think the difference here is the way to court views the importance of enforcing the ant us laws. Justice Kavanaugh made it very clear that the Court will vindicate consumer rights when they're affected by any trust violations and I think

that's an important principle. This was a five to four ruling, and the swing vote was the newest justice, as you mentioned, Brett Kavanaugh, who joined with the Court's liberal wing, which is an unusual alignment so far, and he's sort of

signaled that in the oral arguments. We were very gratified with the kinds of questions that Justice Kavanaugh was asking because it made us think that he was going to apply Illinois Brick the way the Court has always applied it, which is in a very straightforward, very formalistic way, without looking behind the transaction to the economics that Apple wanted the Court to consider. Let's go back for just a

moment and tell us the issue in the case. So, under the Supreme Court's Decision seven decision in Illinois Brick, the only plaintiffs who have standing to sue a monopolist are those who directly deal with a monopolist. And even if they may pass on some portion of their injury to downstream users, those downstream users don't have standing. The first person to deal with a monopolist is the one who has standing and can recover all the antitrust damages.

And here, as Justice Kavanaugh says in the very first part of his decision, it's undisputed that iPhone owners bought apps directly from Apple, who is the alleged monopolist. So the way the Supreme Court has been deciding this issue for more than forty years, it's the consumers who have the standing to bring this claim. The other Trump appointee, Justice Neil Gores, which wrote the descent, saying the ruling exalts form over substance and to some degree justice course,

which is correct. The Supreme Court has consistently said that the standing requirement under Illinois Brick is a formalistic rule. In fact, a few years after Illinois Brick was decided, in a case called Utiliccorp. The Supreme Court said, We're going to apply this rule formalistically. We're not going to be persuaded by any economic arguments. Even when the parties agree that the first party purchaser suffered no damage passed on all the injury to a downstream purchaser, we don't care.

It's the first person who deals with a monopolist who we are going to recognize as the party withstanding. And that's the way the Court has interpreted this rule all along. Mark an organization that represented Facebook, Google and other tech giants told the Supreme Court that allowing this lawsuit to proceed would put quote these platforms services under threat. So how important is this case to other platforms? I think that Apple is unique in the way it runs the

App Store. It's the only online platform I know of that has a perfect monopoly. I think what puts Apple and its platform at risk is its monopolistic practices. It's alleged monopolistic practices, not the way the Court has interpreted Illinois Brick. It's been interpreting Illinois Brick that way since it decided Illinois Brick in seven. It's the monopoly that

causes the problem for Apple. Now, you file this suit first in two thousand seven, shows you how slowly the reels of justice turn any other obstacles in your way before you get to an actual trial. Well, sure, I'm convinced that Apple is going to defend this case vigorously. They have been for the last twelve years. We still have to go through class certification on this case. We have to do discovery. There's going to be expert battles

over damages. But the fundamental fact remains that we have standing to bring the claim, and as Justice course, that's made very clear in his opinion, we will be entitled to recover all of the economic injury caused by the overcharges for the iPhone Apple. What's the estimate of those damages? Well, the size of the market is enormous. Is as you know, Apple's revenue from from the app store is in the

billions of dollars a year. We have a class period that begins in two thousand seven, so current it's twelve years of over charges for iPhone apps, and I'm quite sure that the damages in this case will be measured in the billions of dollars as well. Any feeling as to whether there might be a settlement as this goes on.

Apple's reputation is litigate, litigate, litigate. We'll see whether that changes in this case because of the size of the case and also the threat that an injunction has to its business model, But for the time being, we intend to litigate vigorously and all the way up to the jury. Looking at this case in light of the line of cases of the Supreme Court dealing with class arbitration class action, does this stand for any broader principle or is it

just on its facts. No, I think it's actually a pretty broad opinion, and I think the Court made clear that they will protect consumers from monopolists. And what's unusual about this case is the way Apple insinuated itself in the middle of the transaction. You have app developers at the beginning end, you have Apple in middle, and then you have consumers at the far end of the transaction.

And the Court says, when a consumer deals with a monopolist, we're going to protect the consumers if they're injured by monopolistic practices. And I think that's a pretty broad principle. You only have Justice Kavanaughs the swing vote here. It seems like the other four justices, the conservative or the business minded justices, were pretty firm in their camp. Well, if if this one the other way, I'm sure Apple would be calling it a victory. To five four affirmed

is five four firmed. I'll take the win when I can get it, all right, We hear that, Thanks so much. That's Mark Rifkin. He is the managing partner at Wolf Hauldenstein and I represented the consumers in this class action. Thanks for listening to the Bloomberg Law Podcast. You can subscribe and listen to the show on Apple Podcasts, SoundCloud, and on bloomberg dot com slash podcast. I'm June Brasso. This is Bloomberg. You can be Vie