47 Analyses of this case by attorneys

  1. Evolving Antitrust Principles in the Age of Big Tech: Supreme Court Allows Antitrust Suit to Move Forward Against Apple

    Patterson Belknap Webb & Tyler LLPRobert LoBueMay 21, 2019

    Apple moved to dismiss, arguing thatIllinois Brick’s direct-purchaser rule bars the plaintiffs from suing Apple under the antitrust laws. InIllinois Brick Co. v. Illinois, 431 U.S. 720 (2019), the State of Illinois sued Illinois Brick – a manufacturer and distributor of concrete blocks – alleging that Illinois Brick engaged in a conspiracy to fix the price of concrete blocks in violation of Section 1 of the Sherman Act. Illinois Brick sold these concrete blocks primarily to masonry contractors, who in turn used them to build masonry structures which are sold to general contractors.

  2. Hartig Drug Co. v. Senju Pharmaceutical Co. (3rd Cir. 2016)

    McDonnell Boehnen Hulbert & Berghoff LLPKevin E. NoonanSeptember 8, 2016

    Whether or not a plaintiff as antitrust standing does not implicate the subject matter jurisdiction under Article III according to the opinion, citing Ethypharm S.A. France v. Abbott Laboratories, 707 F.3d 223, 232 (3d Cir. 2013). And this distinction, according to the Court, is at the heart of the Supreme Court's explanation of the "direct purchaser rule" in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), wherein the Court stated that "although indirect purchasers 'may have been actually injured by antitrust violations' through passed-on overcharges, the 'legislative purpose[s]' underlying the antitrust statutes would still be better served by limiting recovery to the direct purchasers paying those overcharges in the first instance." 431 U.S. at 746.

  3. California Court of Appeal Drops The Other Shoe: Pass-on Defense Viable

    Sheppard, Mullin, Richter & Hampton LLPAugust 15, 2008

    in shoe machine rentals and what it would have paid had the defendant been willing to sell those machines.The defendant countered that Hanover Shoe suffered no legally cognizable injury because any illegal overcharge was reflected in the price it charged its customers for its shoes.The United States Supreme Court held that the plaintiff proved antitrust injury and damages when it proved that it was overcharged, and the possibility that it might have recouped the overcharge by “passing it on” to its customers was not relevant.The decision was premised on “insurmountable evidentiary problems” because “[a] wide range of factors influence a company’s pricing policies” and the amount of the overcharge passed on to the consumer.The Supreme Court also expressed concern that if a direct purchaser were not allowed to sue for overcharges passed on to indirect purchasers, indirect purchasers would lack the incentive to bring an antitrust action.Hanover Shoe, 392 U.S. at 494.Nine years later, in Illinois Brick v. Illinois, 431 U.S. 720 (1977) (“Illinois Brick”),the Supreme Court addressed the flip-side of Hanover Shoe,addressing whether the pass-on theory could be used “offensively” such that an indirect purchaser plaintiff could pursue a claim against an alleged antitrust violator.The Supreme Court held that indirect purchasers were not parties “injured in [their] business or property” within the meaning of the antitrust laws and therefore lacked standing to sue in federal antitrust cases.Only the direct purchaser was the injured party.To avoid serious risks of multiple liability, the Court reasoned that the Hanover Shoe rule prohibiting use of the defensive pass-on theory “must apply equally to plaintiffs and defendants,” and was concerned that permitting the use of pass-on theories would “transform treble-damages actions into massive efforts to apportion the recovery among all potential plaintiffs.”Id.

  4. Indirect Purchaser and Remoteness Doctrines Barred Antitrust Claims Against Microsoft by End-User Software Licensees

    Sheppard, Mullin, Richter & Hampton LLPJune 8, 2006

    A question arising from end-user license agreements ("EULAs"), which accompany applications software programs that have been preinstalled on personal computers, is whether they are sufficient to create the type of direct economic relationship between the end-users and the software maker that could support an action under the federal antitrust laws. See Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) (barring indirect purchasers claims for recovery of illegal overcharges under the federal antitrust laws). A related question is whether such end-users would have standing to allege antitrust damages claims under the Associated General Contractors v. California State Council of Carpenters, 459 U.S. 519 (1983) (barring remote claims when more direct victims existed who could sue).

  5. Supreme Court Upholds Ninth Circuit Decision: Antitrust Action Against Apple May Proceed

    Carlton FieldsMay 21, 2019

    In a 5-4 ruling issued on Monday, the U.S. Supreme Court in Apple Inc. v. Pepper determined that iPhone users may proceed with their claims against Apple over its alleged anticompetitive app store practices. The decision upholds the Ninth Circuit’s finding that the plaintiffs are direct purchasers with standing to bring their claims against Apple.The interpretation of this key issue — whether the plaintiff is a “direct purchaser” under the rule established by the landmark decision, Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), and therefore allowed to recover damages for antitrust overcharge injuries — is often at the forefront of antitrust actions.In this case, the plaintiff iPhone users claimed that Apple exercises its monopoly power to charge higher-than-competitive prices for the apps sold in Apple’s App Store. The plaintiffs asserted that, as iPhone users, they are prevented from purchasing apps anywhere other than the App Store and have no choice but to pay the prices charged.Apple argued the plaintiffs were not direct purchasers, and thus barred by Illinois Brick from bringing their claims.

  6. Apple Inc. v. Pepper: The Supreme Court Chips Away at Illinois Brick, Allowing iPhone Users to Sue Apple for Monopolizing iPhone Apps

    Akin Gump Strauss Hauer & Feld LLPPratik ShahMay 20, 2019

    The plaintiffs in Apple Inc. v. Pepper, 587 U.S. ___ (2019), say that they’ve paid too much for apps because of Apple’s allegedly anticompetitive policy of not allowing app purchasers on Apple devices to buy apps from other platforms. That policy has allowed Apple to make more money by charging a higher commission than it would have in a competitive situation.But the iPhone owners ran into a legal problem: Illinois Brick Co. v Illinois, 431 U.S. 720 (1977), which prohibits federal antitrust suits by indirect purchasers. Apple argued that the commissions it received were from the app developers who then determined what price to charge the app purchasers.

  7. Emerging Technologies Washington Update May 2019 #3

    McGuireWoods ConsultingMay 17, 2019

    The Court split 5-4 with Justice Kavanaugh writing for the majority and Justice Gorsuch writing the dissent. The decision was not a ruling on the merits of the antitrust law claims, but only on who may sue, which turned on how to apply Illinois Brick Co. v. Illinois (1977). The majority read that decision to create a “bright-line rule” that only direct purchasers may sue alleging monopolization, and that it is “undisputed that the iPhone owners bought the apps directly from Apple.”

  8. Illinois Brick Simplified: U.S. Supreme Court Rules That Purchasers from iPhone App Store Can Sue Apple Despite the Fact that Apple Does Not Set App Prices

    Pepper Hamilton LLPMay 17, 2019

    On May 13, 2019, in a 5-4 decision, the U.S. Supreme Court rejected the views of the U.S. Solicitor General, the Department of Justice’s Antitrust Division, and the Federal Trade Commission when it kept alive a putative class action brought by iPhone owners against Apple for its alleged monopoly of the retail market for iPhone applications (apps). The issue before the Court was whether Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), barred iPhone owners from claiming that Apple’s app store monopoly harmed them, despite the fact that developers, not Apple, set the prices for apps. The Court held that, under Illinois Brick, iPhone owners purchase their apps directly from Apple, and, therefore, are permitted to sue it for damages based on any anticompetitive prices they paid because of Apple’s alleged monopolistic 30 percent commission on all apps it sells.By contract and through other limitations, Apple’s App Store is the only place where plaintiff iPhone owners can legally purchase apps.

  9. Supreme Court Allows Antitrust Suit to Proceed Against Apple

    Holland & Knight LLPMay 17, 2019

    These consumers allege that Apple unlawfully monopolized the aftermarket for iPhone apps and that, in the absence of such a monopoly, market pressure would force Apple to lower its commission and allow developers to reduce their prices to consumers. Thus, the iPhone owners allege that Apple is overcharging for apps using the App Store.The crux of the Court's decision centers on precedent set in 1977 with the Supreme Court decision Illinois Brick Co. v. Illinois, 431 U.S. 720. In Illinois Brick, the State of Illinois paid a masonry contractor to construct buildings.

  10. Supreme Court Upholds Ninth Circuit Decision: Antitrust Action Against Apple May Proceed

    Carlton Fields Jorden BurtDavid B. EsauMay 17, 2019

    In a 5-4 ruling issued on Monday, the U.S. Supreme Court in Apple Inc. v. Pepper determined that iPhone users may proceed with their claims against Apple over its alleged anticompetitive app store practices. The decision upholds the Ninth Circuit’s finding that the plaintiffs are direct purchasers with standing to bring their claims against Apple.The interpretation of this key issue — whether the plaintiff is a “direct purchaser” under the rule established by the landmark decision, Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), and therefore allowed to recover damages for antitrust overcharge injuries — is often at the forefront of antitrust actions.In this case, the plaintiff iPhone users claimed that Apple exercises its monopoly power to charge higher-than-competitive prices for the apps sold in Apple’s App Store. The plaintiffs asserted that, as iPhone users, they are prevented from purchasing apps anywhere other than the App Store and have no choice but to pay the prices charged.Apple argued the plaintiffs were not direct purchasers, and thus barred by Illinois Brick from bringing their claims.