Apple Wants iPhone Monopoly Suit Dismissed
Does Apple maintain a monopoly over iPhone applications? Consumers think so. Apple attorneys say "No way!" They've asked federal Judge Yvonne Gonzalez Rogers to dismiss the monopoly litigation. Roger has yet to rule on the matter.
The iPhone app suit is one of three suits Apple faces. It faces another antitrust lawsuit before Rogers for allegedly maintaining a music-downloading monopoly. It also faces an antitrust lawsuit in federal court in New York by the U.S. government. The Feds have accused Apple of price collusion with other publishers regarding digital books to undercut Amazon.com Inc.’s dominance of the industry.
This iPhone app suit filed in 2011 alleges that a monopoly exists because iPhone users who don't want to pay what developers charge for applications available through Apple’s App Store are captive. They can't buy the apps anywhere else. To do business with Apple, iPhone software developers must turn over 30 percent of what they charge for an app. This increases prices and excludes competitors from the iPhone “aftermarket” of applications, consumers claim.
According to Apple attorney, Dan Wall, at the hearing in Oakland, California, "There's nothing illegal about creating a system that is closed in a sense." Since Apple doesn't set app prices but merely charges for distribution on its unique platform, Apple attorneys say there is no violation of antitrust laws.
Alexander Schmidt is the attorney representing the seven consumers who are suing. Schmidt asked a telling question. " Can a consumer go somewhere else to buy Angry Birds for the iPhone? If the answer is no, then Apple is a monopolist.”