The Court Weighs in on Suing Online Platforms

The U.S. Supreme Court could soon decide in Apple Inc. v. Pepper which purchasers can pursue private antitrust challenges to the conduct of online platforms.

Plaintiffs who purchased apps for Apple devices allege that Apple has inflated prices by (1) requiring that apps for its devices be sold only in its online store and (2) charging a commission to app developers—which they allegedly recoup through higher prices. Apple argues that plaintiffs lack standing under the 1977 U.S. Supreme Court decision in Illinois Brick Co. v. Illinois, which held that only direct purchasers can sue under the federal antitrust laws. That is, the plaintiffs here are “indirect” purchasers because they are customers of the app developers, not Apple. Plaintiffs rely on their direct purchases from Apple, which allegedly monopolizes the distribution of apps. At the November 26, 2018, oral argument, some justices expressed that this “closed system” may distinguish Illinois Brick.

“The Court appears prepared to revisit the Illinois Brick doctrine and evaluate its application to online platforms,” says Crowell & Moring’s John Gibson. “The Court could also broadly define direct purchasers, thus exposing firms to greater antitrust liability.”