Apple v. Pepper Elevated to U.S. Supreme Court, Where Developers Seek Acknowledgment

C. Dunlap

Summary Bullets:

  • The U.S. Supreme Court is taking on the Apple v. Pepper antitrust case to determine whether the Apple iOS App Store represents an anti-competitive monopoly and, as such, whether users can sue Apple.
  • A ruling for Apple by the court will impact software developers’ ongoing role in providing the innovation behind mobile apps.

The newly pending U.S. Supreme Court case which will determine whether Apple’s App Store distribution model represents an anti-competitive monopoly could have far-reaching ramifications among software developers, whose collective brain trust is already at a premium and in great shortage.

At issue is whether end users are technically buying their apps from Apple or the independent software developers creating and distributing those apps through the Apple iOS App Store. Because Apple requires apps running on its iOS devices to be sold through its App Store, which charges the developers a 30% commission fee on app revenues, developers and customers are accusing Apple of jacking up prices under a monopoly practice.

It all started back in 2011, when iPhone owner Robert Pepper filed an antitrust complaint claiming unfair pricing by Apple under its distribution model. Apple won the case in 2014, but a court of appeals reversed the decision in 2017. This summer, the Supreme Court agreed to hear Apple’s case, and developer consortiums are waging campaigns in the U.S. seeking sympathy along with acknowledgement of their massive contribution to the popularity of mobile devices.

Morgan Reed, President of the App Association representing small business developers in the U.S., recently commented on the issue, noting that it is the small business software developers who make iPhone devices exciting and useful via their innovative designs, not Apple, regardless of which platform is used. It would therefore be devastating if it was decided that Apple was the customer as opposed to the actual end users, placing more power in the hands of Apple.

Indirectly but equally important will be the court’s ability to help the industry validate the critical role of the technologists and developers in driving the cloud and mobile revolution (arguably the economy’s greatest asset currently), if we can sustain this brain trust. Unfortunately, the court case illustrates a larger issue, which is the lack of qualified technical expertise available to meet the insatiable demand for innovation in a fast-moving industry that involves big data and real-time analytics. Reed said there are currently 500,000 open technology job requisitions in the U.S. which companies are struggling to fill, including software programmers and data scientists.

A win for Apple will only help steer young people away from computer science degrees. Apple reportedly made $11 billion last year solely in App Store commissions, illustrating the David and Goliath scenario of this court case when considering the greed behind corporate America versus overextended independent software developers.

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