There's another strange twist in the story of the modern app store - the Supreme Court has decided that it will rule on whether or not the Apple App Store is a monopoly or not. The strange part is that it doesn't have to and usually wouldn't get involved.

There is no question that the Apple App Store is a monopoly in the loose sense of the word. Indeed, it is an aggressively enforced monopoly that ensures that Apple gets 30% of every app sold, about $11 billion a year, there being no other way to get an app onto an iOS device. What is less clear is if the monopoly is distorting prices, and this is the important point about a monopoly that is working against consumer interest. Normally the courts only get involved if a monopoly is causing prices to be higher than they should be.

This is the claim of the case Apple Inc. v. Pepper which has asked the government to break up the monopoly. Lower courts have heard similar cases and are in agreement not to proceed - the Supreme Court only gets involved if there is a disagreement that needs to be set right.

The first question is if Apple's monopoly is a conspiracy to raise prices.  The issue is clouded because of another case that established the precedent that you can't sue for anti-trust damages if the company is not the direct seller. As Apple acts as a middleman for the app developer, it can be argued that it is more like a mall providing hosting for a range of smaller shopkeepers. The counter argument is that Apple is monopolising the distribution of apps and this is stopping other apps stores from establishing themselves and competing for business by taking a smaller commission. This would allow app makers to reduce their prices and so the monopoly is, by this argument, hurting the consumer.

If Apple loses the case then there will be a knock-on effect on other monopolistic distribution channels, such as Amazon. Arguably Android (Google Play) won't have this problem, however, as there is the Amazon app store.

Even if the Supreme Court rules that the case can go to trial, there is still a long road before it is settled. There are wider arguments including that, as there are other phones, the user still has a choice and there is competition.

As a programmer I'd love to see the iOS app market opened up to competition and different types of scrutiny. It is not just that Apple controls the app market to keep malware off the market, it also has opinions on what is permissible and what is not.

More Information

U.S. top court mulls Apple's App Store commissions in antitrust case

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