CAME 2019 alum scores Supreme Court win over Apple

Mark Rifkin on the Two-Sided Markets panel at CAME 2019

Just one week after participating in the 2019 Class Action Money & Ethics Conference, attorney Mark Rifkin of Wolf Haldenstein scored a big win when the Supreme Court ruled in his favor on Monday.

"A divided U.S. Supreme Court on Monday gave the go-ahead to an antitrust lawsuit accusing Apple Inc of forcing consumers to overpay for iPhone software applications, a decision that could lead to billions of dollars in damages and put at risk the company’s lucrative way of selling apps," Reuters reported.

"The consumer plaintiffs [represented by Rifkin] claim Apple monopolized the market in violation of federal antitrust law by requiring that apps be sold through its App Store and extracting an excessive 30 percent commission on purchases."

Rifkin gave examples from the Apple case and other two-sided markets in the Two-Sided Markets panel, which he shared with Darryl Anderson of Norton Rose Fulbright, David Kaplan of Berkeley Research Group and Leah Nylen of MLex Market Insights.

Rifkin explained that, by requiring that all third parties price their apps in a way that ends in 99 cents ($0.99, $1.99, etc.), Apple illegally used its sole control of the iPhone's App Store to cause injury to both app developers and the consumers who bought those apps.

In one example, Rifkin cited the economic concept of price equilibrium, in which the market sets the price where supply meets demand. But with Apple's artificial adjustments up (or down) to end in 99 cents, according to economic theory the quantity of units sold will inevitably fall (or rise). In every case where the natural price equilibrium wouldn't end in 0.99, there would have been injury either to developers who could have sold more units at a lower price or to consumers who would have bought more units.

Rifkin told Bloomberg that the ruling was "a major victory for consumers in an increasingly consumer-unfriendly environment." He added in a statement to Reuters that “the overcharges paid by consumers since Apple’s monopoly began will be measured in the billions of dollars.”

This panel on two-sided markets explored whether consumers have the right to sue anyone who provides goods and services when prices are set by third parties. Distributed smartness where technology and innovation meet indirect purchasers is at the core of this discussion. Watch the full panel below.