Apple v. Pepper: The Unintended Fallout in Europe

Abstract

In Apple v. Pepper, the US Supreme Court held that iPhone users were direct purchasers of apps from Apple, which, according to precedent set by Illinois Brick v. Illinois, made them the proper plaintiffs to sue Apple for antitrust damages. The damages were the result of Apple’s alleged monopolization of the app distribution aftermarket through imposing a supra-competitive 30 percent commission fee to the price of each downloaded app. The case was closely watched because the Court’s decision controlled whether plaintiffs could proceed with the substantive issues in their complaint, namely whether Apple is a monopolist and whether it has monopolized the app distribution market. The decision was positively received by the public, for it gave standing to consumers against big tech, but scholarly commentary has been more reserved and even critical. This note adds to the ongoing debate on the case by showing how the Court’s decision, whose effects are seemingly confined in US antitrust law, can have an impact on EU competition law and its enforcement. The two ways by which the case can have an unanticipated fallout in Europe relate to the Court’s implicit rejection of indirect purchasers’ right to claim damages, and the Court’s implicit designation of Apple as an intermediary instead of an agent of app developers.