U.S. Supreme Court: Antitrust ’Direct Purchaser’ Rule Survives, But So Do Monopolization Claims Against Apple

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On May 13, 2019, the U.S. Supreme Court reaffirmed that private claims under the federal antitrust laws cannot be brought by "indirect purchasers" who did not purchase goods or services directly from the alleged anticompetitive actor(s), an important and longstanding constraint on treble damages claims. In Apple v. Pepper, the Court permitted a putative class of iPhone owners to proceed with their claims that Apple monopolized the aftermarket for iPhone applications, allegedly allowing Apple to charge supracompetitive commissions on apps sold through its App Store. Yet in so doing, the Court held by a 5-4 vote that the iPhone owners’ claims were not barred by the "direct purchaser" rule first articulated in the Court’s Illinois Brick decision, because the iPhone owners claimed to have purchased apps directly from Apple. While the facts of Apple’s case may be unique, the decision could have significant implications as private litigants test the applicability of the Court’s holding to similar online distribution platforms, with the Antitrust Division of the U.S. Department of Justice signaling that it plans to intervene in such cases.