On Dec. 2, 2013, U.S. District Judge Yvonne Gonzalez Rogers of the Northern District of California tossed a monopolization suit against Apple Inc. that accused it of attempting to corner the market on iPhone apps. The plaintiffs complained about Apple’s practice of requiring app developers to pay Apple a 30 percent commission on their app sales, which they claimed unfairly drove up the prices of apps and reduced competition. Judge Rogers found, however, that while plaintiffs may have attempted to frame the issue as if the consumer was paying a 30 percent fee directly to Apple, with Apple taking 30 percent off the top and remitting the remaining 70 percent to the developer, in reality Apple had already charged the 30 percent fee to the developer, which the developer passed through to the consumer.
In reaching its decision to dismiss the case, the court was guided by Illinois Brick Co. v. Illinois and In re ATM Fee Antitrust Litig., which teach that, in order to qualify as a direct purchaser who can meet the “injury” requirements of § 4 of the Clayton Act, a plaintiff must show that they paid the set price for the product. Because the iPhone consumers did not pay the set price, but rather an ultimate price that they allege was 30 percent higher than it would have been in the absence of Apple’s commission, the court held that the “alleged conduct does not equate to price fixing.” And, because the fee was borne by the developers who must pay the fee out of their proceeds, not by the consumers, the consumers could not be direct purchasers and, thus, lacked antitrust standing.