Apple’s Supreme Setback

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Apple was dealt a setback today, as the US Supreme Court ruled 5 to 4 that individual purchasers do have the right to sue them for antitrust behavior. Today’s vote stems from a 2011 lower court case, Apple v Pepper, in which a group of individuals sued the company claiming they were using monopoly pricing power in the App Store. Apple contested the individual users’ right to sue them directly based on court precedent and the matter made it all the way to the highest court in the land.

While this is a notable setback for the company, it is a procedural loss, not a loss of the case itself. Apple certainly would have preferred for this suit’s road to end today in a dismissal, but the decision just means that the case will once again proceed in a lower court. You can bet that will be a very slow, very drawn out process.

In the end, I find it unlikely that Apple will lose this case. Unless a judge decides to go rogue and ignore existing precedent and case law, they won’t lose this case. Apple’s comment today after the decision was absolutely true: “The App Store is not a monopoly by any metric.” It just isn’t, at least not by any existing definition of the word. Consumer activists are trying their damnedest to re-frame that argument in the court of public opinion at the moment, with current and hopeful politicians jumping into the sound byte fray left and right to cash in on the moment. But NONE of that makes one bit of difference when it comes to our existing laws and precedents.

Make no mistake. Apple will almost certainly win this one in the end. At the same time, I am not arguing that there isn’t room for some regulation in Silicon Valley. There definitely is, and the big CEOs are jumping on-board one by one. Tim Cook was notably one of the first to make this leak publicly.

However, the more extreme claims of antitrust and “break them up” chants are simply overcooked and under developed. This is nothing more than the proverbial sledgehammer in place of a scalpel. While some regulation created for the digital age is necessary, what we don’t need is an massive over-reaction spurred on by the same politicians who have sat idly by without acting all this time. The same goes for the judge in this trial. Stick to the case law and the facts. If that happens, Apple v Pepper will die a long, slow death.

What bugs me about this is all of the so-called “consumer activists” coming out of the woodwork to throw stones over this and other similar cases and regulatory matters. I’ll call out one such article by Therese Poletti at MarketWatch entitled Apple’s loss at the Supreme Court is a big victory for consumers fighting Big Tech’s app and platform monopolies. These sentiments exhibit a lack of perspective, in my opinion. The thought that all tech platforms have crossed some kind of line now and must be stopped dead cold is absolutely ridiculous.

For someone like me, who’s been a tech fan for a long time and can remember what things were like in the days before the App Store, I absolutely disagree with this historically-ignorant pendulum swing. I remember what the “free and competitive” market for Windows Mobile apps was like. A disorganized mess. It was a ghost town and the apps that were worth having were incredibly expensive. Like $25 to $50 each expensive. Neither the supply or the demand were there.

Apple’s App Store was the pivotal development that changed all of that. They put the store on the device and handled the discovery, hosting, payments and  all the other hassles that used to be left to developers themselves. For all you youngsters, let me tell you something. NO ONE was crying about antitrust or monopoly potential in 2009. We were too busy taking advantage of one of the biggest developments in the history of mobile computing. By making the dispersal of apps easier for both consumers and developers, Apple hit the nail on the head.

Does this mean that Apple and their App Store should be considered above reproach? No. Should we penalize them because they are “too successful?” Hell no. Everyone needs to slow down and stop with the weak as water “break them up” arguments and legally empty antitrust and monopoly claims and focus on regulation that is legal and might actually accomplish something without crippling the biggest companies in the US economy.

If you are an Apple hater enjoying a little schadenfreude, take note of that last bit. If Apple were to fail in this case, it will be open season on big tech in the courts. No matter which companies you prefer, the whims of the litigious mob and the campaign promises of thirsty politicians are NOT the right way to fix anything in Silicon Valley, or anywhere else for that matter.


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