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Insights from the Supreme Court’s Apple v. Pepper Decision

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In May 2019, the U.S. Supreme Court issued a 5–4 decision in Apple v. Pepper, one of the Court’s most significant antitrust rulings of the last several years. In a majority opinion authored by Justice Kavanaugh, the Court held that iPhone owners who purchased software applications ("apps") from Apple’s App Store are "direct purchasers" and therefore have standing to sue Apple for alleged monopolization of an aftermarket for iPhone apps. The Apple opinion narrows the so-called Illinois Brick defense, expands opportunities for private antitrust litigation, and warrants careful assessment by retailers, distributors, and companies operating electronic marketplaces. While some companies might consider restructuring distribution arrangements to mitigate increased exposure from this decision, such restructuring could undercut an efficient business model.