Apple Inc. v. Pepper — Supreme Court Clarifies Scope of Illinois Brick: U.S. Supreme Court Permits Antitrust Claims Against Apple by Purchasers of iPhone Apps to Proceed Under Illinois Brick

Sullivan & Cromwell LLP - May 15, 2019
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This week, in a widely watched antitrust case, the U.S. Supreme Court held in Apple Inc. v. Pepper that the prohibition on indirect-purchaser claims articulated in Illinois Brick Co. v. Illinois did not bar a lawsuit brought against Apple by consumers who purchased iPhone applications from Apple’s App Store.  The Court ruled that, although developers set the prices of their “apps” sold through Apple’s App Store, the consumers who bought those apps were direct purchasers from Apple, and thus permissible plaintiffs under Illinois Brick.  In so ruling, the Court rejected Apple’s argument that the Illinois Brick analysis should turn on whether an antitrust defendant sets the retail purchase price.  The Court’s decision clarifies the application of the indirect-purchaser bar in lawsuits against commission-based retailers, and thus may spur additional antitrust suits against such retailers.