throbber

`(Slip Opinion)
`
`
`
` OCTOBER TERM, 2018
`
`
`Syllabus
`
`1
`
` NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
`
`
`
` being done in connection with this case, at the time the opinion is issued.
`
`
`
` The syllabus constitutes no part of the opinion of the Court but has been
`
` prepared by the Reporter of Decisions for the convenience of the reader.
`
` See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
`
`
`SUPREME COURT OF THE UNITED STATES
`
`
`
` Syllabus
`
`
`
` APPLE INC. v. PEPPER ET AL.
`
`CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
`
`THE NINTH CIRCUIT
` No. 17–204. Argued November 26, 2018—Decided May 13, 2019
`
`Apple Inc. sells iPhone applications, or apps, directly to iPhone owners
`through its App Store—the only place where iPhone owners may law-
`fully buy apps. Most of those apps are created by independent devel-
`
` opers under contracts with Apple. Apple charges the developers a
` $99 annual membership fee, allows them to set the retail price of the
`
`apps, and charges a 30% commission on every app sale. Respond-
` ents, four iPhone owners, sued Apple, alleging that the company has
`
`unlawfully monopolized the aftermarket for iPhone apps. Apple
`
` moved to dismiss, arguing that the iPhone owners could not sue be-
` cause they were not direct purchasers from Apple under Illinois Brick
`
`Co. v. Illinois, 431 U. S. 720. The District Court agreed, but the
`Ninth Circuit reversed, concluding that the iPhone owners were di-
`
`rect purchasers because they purchased apps directly from Apple.
`Held: Under Illinois Brick, the iPhone owners were direct purchasers
`who may sue Apple for alleged monopolization. Pp. 4–14.
`
`(a) This straightforward conclusion follows from the text of the an-
`titrust laws and from this Court’s precedent. Section 4 of the Clayton
`
`Act provides that “any person who shall be injured in his business or
`
`property by reason of anything forbidden in the antitrust laws may
`sue.” 15 U. S. C. §15(a). That broad text readily covers consumers
`who purchase goods or services at higher-than-competitive prices
`
`from an allegedly monopolistic retailer. Applying §4, this Court has
`consistently stated that “the immediate buyers from the alleged anti-
`
`trust violators” may maintain a suit against the antitrust violators,
`
`Kansas v. UtiliCorp United Inc., 497 U. S. 199, 207, but has ruled
`
`that indirect purchasers who are two or more steps removed from the
`
`violator in a distribution chain may not sue. Unlike the consumer in
`Illinois Brick, the iPhone owners here are not consumers at the bot-
`
`
`
`

`

`2
`
`
`APPLE INC. v. PEPPER
`
`
`Syllabus
`tom of a vertical distribution chain who are attempting to sue manu-
`facturers at the top of the chain. The absence of an intermediary in
`the distribution chain between Apple and the consumer is dispositive.
`Pp. 4–7.
`
`(b) Apple argues that Illinois Brick allows consumers to sue only
`
`the party who sets the retail price, whether or not the party sells the
`good or service directly to the complaining party. But that theory
`
`suffers from three main problems. First, it contradicts statutory text
`and precedent by requiring the Court to rewrite the rationale of Illi-
`
`nois Brick and to gut its longstanding bright-line rule. Any ambigui-
`
`ty in Illinois Brick should be resolved in the direction of the statutory
`
`text, which states that “any person” injured by an antitrust violation
`may sue to recover damages. Second, Apple’s theory is not persua-
`sive economically or legally. It would draw an arbitrary and unprin-
`cipled line among retailers based on their financial arrangements
`with their manufacturers or suppliers. And it would permit a con-
`
`sumer to sue a monopolistic retailer when the retailer set the retail
`price by marking up the price it had paid the manufacturer or suppli-
`
`er for the good or service but not when the manufacturer or supplier
`
`set the retail price and the retailer took a commission on each sale.
`
`Third, Apple’s theory would provide a roadmap for monopolistic re-
`
`
`
`tailers to structure transactions with manufacturers or suppliers so
`as to evade antitrust claims by consumers and thereby thwart effec-
`
`tive antitrust enforcement. Pp. 7–11.
`
`
`(c) Contrary to Apple’s argument, the three Illinois Brick rationales
`
`for adopting the direct-purchaser rule cut strongly in respondents’ fa-
`vor. First, Apple posits that allowing only the upstream app develop-
`ers—and not the downstream consumers—to sue Apple would mean
`
`more effective antitrust enforcement. But that makes little sense,
`and it would directly contradict the longstanding goal of effective pri-
`vate enforcement and consumer protection in antitrust cases. Sec-
`ond, Apple warns that calculating the damages in successful consum-
`er antitrust suits against monopolistic retailers might be
`complicated. But Illinois Brick is not a get-out-of-court-free card for
`monopolistic retailers to play any time that a damages calculation
`might be complicated. Third, Apple claims that allowing consumers
`to sue will result in “conflicting claims to a common fund—the
`
`amount of the alleged overcharge.” Illinois Brick, 431 U. S., at 737.
`
`But this is not a case where multiple parties at different levels of a
`distribution chain are trying to recover the same passed-through
`overcharge initially levied by the manufacturer at the top of the
`
`chain, cf. id., at 726–727. Pp. 11–14.
` 846 F. 3d 313, affirmed.
`
`
`
`
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`

`

`
`
`3
`
`
`Cite as: 587 U. S. ____ (2019)
`
`
`Syllabus
` KAVANAUGH, J., delivered the opinion of the Court, in which GINS-
`
`
`
` BURG, BREYER, SOTOMAYOR, and KAGAN, JJ., joined. GORSUCH, J., filed a
`
`
`
`
`
`
`
`dissenting opinion, in which ROBERTS, C. J., and THOMAS and ALITO, JJ.,
`
`
`
`
`joined.
`
`
`
`
`
`

`

`
`
`
`
` Cite as: 587 U. S. ____ (2019)
`
`Opinion of the Court
`
`1
`
` NOTICE: This opinion is subject to formal revision before publication in
`
`
`
`
`
` the preliminary print of the United States Reports. Readers are requested
`
` to notify the Reporter of Decisions, Supreme Court of the United States,
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` Washington, D. C. 20543, of any typographical or other formal errors, in
`
`
`
` order that corrections may be made before the preliminary print goes to
`
`press.
`SUPREME COURT OF THE UNITED STATES
`
`_________________
`
` No. 17–204
`_________________
` APPLE INC., PETITIONER v. ROBERT PEPPER, ET AL.
`
`ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
`
`APPEALS FOR THE NINTH CIRCUIT
`[May 13, 2019]
`JUSTICE KAVANAUGH delivered the opinion of the Court.
`In 2007, Apple started selling iPhones. The next year,
`
`
`Apple launched the retail App Store, an electronic store
`
`where iPhone owners can purchase iPhone applications
`
`from Apple. Those “apps” enable iPhone owners to send
`
`messages, take photos, watch videos, buy clothes, order
`food, arrange transportation, purchase concert tickets,
`
`donate to charities, and the list goes on. “There’s an app
`for that” has become part of the 21st-century American
`
`lexicon.
`In this case, however, several consumers contend that
`
`
`Apple charges too much for apps. The consumers argue,
`
`in particular, that Apple has monopolized the retail mar-
`ket for the sale of apps and has unlawfully used its mo-
`nopolistic power to charge consumers higher-than-
`competitive prices.
`A claim that a monopolistic retailer (here, Apple) has
`
`
`used its monopoly to overcharge consumers is a classic
`antitrust claim. But Apple asserts that the consumer-
`
`plaintiffs in this case may not sue Apple because they
`supposedly were not “direct purchasers” from Apple under
`
`our decision in Illinois Brick Co. v. Illinois, 431 U. S. 720,
`
`
`
`
`

`

`2
`
`
`APPLE INC. v. PEPPER
`
`Opinion of the Court
`745–746 (1977). We disagree. The plaintiffs purchased
`apps directly from Apple and therefore are direct purchas-
`ers under Illinois Brick. At this early pleadings stage of
`the litigation, we do not assess the merits of the plaintiffs’
`antitrust claims against Apple, nor do we consider any
`other defenses Apple might have. We merely hold that the
`Illinois Brick direct-purchaser rule does not bar these
`
`plaintiffs from suing Apple under the antitrust laws. We
`
`affirm the judgment of the U. S. Court of Appeals for the
`Ninth Circuit.
`
`
`
`I
`
`In 2007, Apple began selling iPhones. In July 2008,
`Apple started the App Store. The App Store now contains
`about 2 million apps that iPhone owners can download.
`By contract and through technological limitations, the App
`Store is the only place where iPhone owners may lawfully
`
`buy apps.
`
`
`For the most part, Apple does not itself create apps.
`Rather, independent app developers create apps. Those
`
`independent app developers then contract with Apple to
`make the apps available to iPhone owners in the App
`Store.
`
`Through the App Store, Apple sells the apps directly to
`iPhone owners. To sell an app in the App Store, app de-
`
`velopers must pay Apple a $99 annual membership fee.
`Apple requires that the retail sales price end in $0.99, but
`
`otherwise allows the app developers to set the retail price.
`Apple keeps 30 percent of the sales price, no matter what
`the sales price might be. In other words, Apple pockets a
`
`
`30 percent commission on every app sale.
`
`In 2011, four iPhone owners sued Apple. They allege
`
`that Apple has unlawfully monopolized “the iPhone apps
`
`aftermarket.” App. to Pet. for Cert. 53a. The plaintiffs
`
`allege that, via the App Store, Apple locks iPhone owners
`“into buying apps only from Apple and paying Apple’s 30%
`
`
`
`
`
`

`

`3
`
`
`
`
`
`
` Cite as: 587 U. S. ____ (2019)
`
`Opinion of the Court
`fee, even if ” the iPhone owners wish “to buy apps else-
`where or pay less.” Id., at 45a. According to the com-
`plaint, that 30 percent commission is “pure profit” for
`Apple and, in a competitive environment with other retail-
`ers, “Apple would be under considerable pressure to sub-
`
`stantially lower its 30% profit margin.” Id., at 54a–55a.
`The plaintiffs allege that in a competitive market, they
`
`would be able to “choose between Apple’s high-priced App
`
`Store and less costly alternatives.” Id., at 55a. And they
`allege that they have “paid more for their iPhone apps
`
`than they would have paid in a competitive market.” Id.,
`at 53a.
`
`
`Apple moved to dismiss the complaint, arguing that the
`iPhone owners were not direct purchasers from Apple and
`therefore may not sue. In Illinois Brick, this Court held
`that direct purchasers may sue antitrust violators, but
`
`also ruled that indirect purchasers may not sue. The
`
`District Court agreed with Apple and dismissed the com-
`plaint. According to the District Court, the iPhone owners
`were not direct purchasers from Apple because the app
`developers, not Apple, set the consumers’ purchase price.
`
`The Ninth Circuit reversed. The Ninth Circuit concluded
`that the iPhone owners were direct purchasers under
`
`Illinois Brick because the iPhone owners purchased apps
`
`directly from Apple. According to the Ninth Circuit, Illi-
`
`nois Brick means that a consumer may not sue an alleged
`
`monopolist who is two or more steps removed from the
`consumer in a vertical distribution chain. See In re Apple
`
`iPhone Antitrust Litig., 846 F. 3d 313, 323 (2017). Here,
`however, the consumers purchased directly from Apple,
`the alleged monopolist. Therefore, the Ninth Circuit held
`that the iPhone owners could sue Apple for allegedly
`monopolizing the sale of iPhone apps and charging higher-
`
`
`
`than-competitive prices. Id., at 324. We granted certiorari.
`
`585 U. S. ___ (2018).
`
`
`
`
`
`

`

`4
`
`
`APPLE INC. v. PEPPER
`
`Opinion of the Court
`
` II
`A
`The plaintiffs’ allegations boil down to one straightfor-
`
`ward claim: that Apple exercises monopoly power in the
`
`retail market for the sale of apps and has unlawfully used
`its monopoly power to force iPhone owners to pay Apple
`
`higher-than-competitive prices for apps. According to the
`plaintiffs, when iPhone owners want to purchase an app,
`
`they have only two options: (1) buy the app from Apple’s
`
`App Store at a higher-than-competitive price or (2) do not
`buy the app at all. Any iPhone owners who are dissatis-
`fied with the selection of apps available in the App Store
`
`or with the price of the apps available in the App Store are
`out of luck, or so the plaintiffs allege.
`The sole question presented at this early stage of the
`
`
`case is whether these consumers are proper plaintiffs for
`
`this kind of antitrust suit—in particular, our precedents
`ask, whether the consumers were “direct purchasers” from
`
`Apple. Illinois Brick, 431 U. S., at 745–746. It is undis-
`puted that the iPhone owners bought the apps directly
`
`
` from Apple. Therefore, under Illinois Brick, the iPhone
`owners were direct purchasers who may sue Apple for
`
`alleged monopolization.
`That straightforward conclusion follows from the text of
`
`the antitrust laws and from our precedents.
`
`
`First is text: Section 2 of the Sherman Act makes it
`
`unlawful for any person to “monopolize, or attempt to
`
`monopolize, or combine or conspire with any other person
`or persons, to monopolize any part of the trade or com-
`merce among the several States, or with foreign nations.”
`26 Stat. 209, 15 U. S. C. §2. Section 4 of the Clayton Act
`
`in turn provides that “any person who shall be injured in
`
`
`
`
`his business or property by reason of anything forbidden in
`
`
`
`the antitrust laws may sue . . . the defendant . . . and shall
`recover threefold the damages by him sustained, and the
`
`cost of suit, including a reasonable attorney’s fee.” 38
`
`
`
`
`
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`
`

`

`5
`
`
`Cite as: 587 U. S. ____ (2019)
`
`Opinion of the Court
`Stat. 731, 15 U. S. C. §15(a) (emphasis added). The broad
`
`text of §4—“any person” who has been “injured” by an
`antitrust violator may sue—readily covers consumers who
`
`purchase goods or services at higher-than-competitive
`prices from an allegedly monopolistic retailer.
`
`Second is precedent: Applying §4, we have consistently
`stated that “the immediate buyers from the alleged anti-
`trust violators” may maintain a suit against the antitrust
`violators. Kansas v. UtiliCorp United Inc., 497 U. S. 199,
`
`
`207 (1990); see also Illinois Brick, 431 U. S., at 745–746.
`
`At the same time, incorporating principles of proximate
`cause into §4, we have ruled that indirect purchasers who
`are two or more steps removed from the violator in a
`distribution chain may not sue. Our decision in Illinois
`
`Brick established a bright-line rule that authorizes suits
`
`by direct purchasers but bars suits by indirect purchasers.
`
`Id., at 746.1
`The facts of Illinois Brick illustrate the rule. Illinois
`
`Brick Company manufactured and distributed concrete
`blocks. Illinois Brick sold the blocks primarily to masonry
`contractors, and those contractors in turn sold masonry
`
`structures to general contractors. Those general contrac-
`tors in turn sold their services for larger construction
`
`projects to the State of Illinois, the ultimate consumer of
`the blocks.
`The consumer State of Illinois sued the manufacturer
`
`Illinois Brick. The State alleged that Illinois Brick had
`engaged in a conspiracy to fix the price of concrete blocks.
`
`According to the complaint, the State paid more for the
`concrete blocks than it would have paid absent the price-
`fixing conspiracy. The monopoly overcharge allegedly
`flowed all the way down the distribution chain to the
`
`——————
`
`1 Illinois Brick held that the direct-purchaser requirement applies to
`
`
` claims for damages. Illinois Brick did not address injunctive relief, and
`we likewise do not address injunctive relief in this case.
`
`
`
`
`
`
`
`

`

`6
`
`
`APPLE INC. v. PEPPER
`
`Opinion of the Court
` ultimate consumer, who was the State of Illinois.
`
`
`This Court ruled that the State could not bring an anti-
`trust action against Illinois Brick, the alleged violator,
`because the State had not purchased concrete blocks
`directly from Illinois Brick. The proper plaintiff to bring
`that claim against Illinois Brick, the Court stated, would
`be an entity that had purchased directly from Illinois
`Brick. Ibid.
`The bright-line rule of Illinois Brick, as articulated in
`
`
`that case and as we reiterated in UtiliCorp, means that
`
`
`indirect purchasers who are two or more steps removed
`
`from the antitrust violator in a distribution chain may not
`sue. By contrast, direct purchasers—that is, those who
`are “the immediate buyers from the alleged antitrust
`violators”—may sue. UtiliCorp, 497 U. S., at 207.
`For example, if manufacturer A sells to retailer B, and
`
`retailer B sells to consumer C, then C may not sue A. But
`B may sue A if A is an antitrust violator. And C may sue
`B if B is an antitrust violator. That is the straightforward
`rule of Illinois Brick. See Loeb Industries, Inc. v. Sumi-
`
`
` tomo Corp., 306 F. 3d 469, 481–482 (CA7 2002) (Wood, J.).2
`In this case, unlike in Illinois Brick, the iPhone owners
`
`are not consumers at the bottom of a vertical distribution
`
`chain who are attempting to sue manufacturers at the top
`
`of the chain. There is no intermediary in the distribution
`
`chain between Apple and the consumer. The iPhone
`
`owners purchase apps directly from the retailer Apple,
`
`who is the alleged antitrust violator. The iPhone owners
`
`pay the alleged overcharge directly to Apple. The absence
`
`of an intermediary is dispositive. Under Illinois Brick, the
`
`——————
`2Thirty States and the District of Columbia filed an amicus brief
`supporting the plaintiffs, and they argue that C should be able to sue A
`in that hypothetical. They ask us to overrule Illinois Brick to allow
`
`such suits. In light of our ruling in favor of the plaintiffs in this case,
`we have no occasion to consider that argument for overruling Illinois
`Brick.
`
`
`
`
`
`

`

`7
`
`
`
`
`
`
` Cite as: 587 U. S. ____ (2019)
`
`Opinion of the Court
`iPhone owners are direct purchasers from Apple and are
`proper plaintiffs to maintain this antitrust suit.
`B
`
`All of that seems simple enough. But Apple argues
`strenuously against that seemingly simple conclusion, and
`we address its arguments carefully. For this kind of re-
`
`tailer case, Apple’s theory is that Illinois Brick allows
`
`consumers to sue only the party who sets the retail price,
`
`whether or not that party sells the good or service directly
`to the complaining party. Apple says that its theory ac-
`cords with the economics of the transaction. Here, Apple
`argues that the app developers, not Apple, set the retail
`
`price charged to consumers, which according to Apple
`means that the consumers may not sue Apple.
`
`We see three main problems with Apple’s “who sets the
`price” theory.
`
`
`First, Apple’s theory contradicts statutory text and
`precedent. As we explained above, the text of §4 broadly
`
`affords injured parties a right to sue under the antitrust
`laws. And our precedent in Illinois Brick established a
`bright-line rule where direct purchasers such as the con-
`sumers here may sue antitrust violators from whom they
`
`purchased a good or service. Illinois Brick, as we read the
`opinion, was not based on an economic theory about who
`
`set the price. Rather, Illinois Brick sought to ensure an
`
`effective and efficient litigation scheme in antitrust cases.
`To do so, the Court drew a bright line that allowed direct
`purchasers to sue but barred indirect purchasers from
`suing. When there is no intermediary between the pur-
`chaser and the antitrust violator, the purchaser may sue.
`The Illinois Brick bright-line rule is grounded on the
`“belief that simplified administration improves antitrust
`enforcement.” 2A P. Areeda, H. Hovenkamp, R. Blair, &
`C. Durrance, Antitrust Law ¶346e, p. 194 (4th ed. 2014)
`
`
`(Areeda & Hovenkamp). Apple’s theory would require us
`
`
`
`
`
`

`

`8
`
`
`APPLE INC. v. PEPPER
`
`Opinion of the Court
`to rewrite the rationale of Illinois Brick and to gut the
`
`longstanding bright-line rule.
`
`To the extent that Illinois Brick leaves any ambiguity
`
`about whether a direct purchaser may sue an antitrust
`violator, we should resolve that ambiguity in the direction
`of the statutory text. And under the text, direct purchas-
`ers from monopolistic retailers are proper plaintiffs to sue
`those retailers.
`
`Second, in addition to deviating from statutory text and
`precedent, Apple’s proposed rule is not persuasive econom-
`
`ically or legally. Apple’s effort to transform Illinois Brick
`from a direct-purchaser rule to a “who sets the price” rule
`would draw an arbitrary and unprincipled line among
`
`retailers based on retailers’ financial arrangements with
`their manufacturers or suppliers.
`
`
`In the retail context, the price charged by a retailer to a
`consumer is often a result (at least in part) of the price
`
`charged by the manufacturer or supplier to the retailer, or
`
`of negotiations between the manufacturer or supplier and
`the retailer. Those agreements between manufacturer or
`
`supplier and retailer may take myriad forms, including for
`example a markup pricing model or a commission pricing
`model. In a traditional markup pricing model, a hypothet-
`ical monopolistic retailer might pay $6 to the manufacturer
`
`and then sell the product for $10, keeping $4 for itself. In
`a commission pricing model, the retailer might pay noth-
`ing to the manufacturer; agree with the manufacturer that
`the retailer will sell the product for $10 and keep 40 per-
`
`cent of the sales price; and then sell the product for $10,
`
`send $6 back to the manufacturer, and keep $4. In those
`
`two different pricing scenarios, everything turns out to be
`economically the same for the manufacturer, retailer, and
`consumer.
`
`
`Yet Apple’s proposed rule would allow a consumer to sue
`the monopolistic retailer in the former situation but not
`
`the latter. In other words, under Apple’s rule a consumer
`
`
`
`

`

`9
`
`
`
`
`
` Cite as: 587 U. S. ____ (2019)
`
`Opinion of the Court
`could sue a monopolistic retailer when the retailer set the
`
`retail price by marking up the price it had paid the manu-
`facturer or supplier for the good or service. But a consumer
`
`
`could not sue a monopolistic retailer when the manufac-
`turer or supplier set the retail price and the retailer took a
`commission on each sale.
`Apple’s line-drawing does not make a lot of sense, other
`
`than as a way to gerrymander Apple out of this and simi-
`lar lawsuits. In particular, we fail to see why the form of
`the upstream arrangement between the manufacturer or
`
`supplier and the retailer should determine whether a
`monopolistic retailer can be sued by a downstream con-
`sumer who has purchased a good or service directly from
`the retailer and has paid a higher-than-competitive price
`
`because of the retailer’s unlawful monopolistic conduct.
`
`As the Court of Appeals aptly stated, “the distinction
`between a markup and a commission is immaterial.” 846
`
`F. 3d, at 324. A leading antitrust treatise likewise states:
`
`“Denying standing because ‘title’ never passes to a broker
`is an overly lawyered approach that ignores the reality
`
`that a distribution system that relies on brokerage is
`economically indistinguishable from one that relies on
`purchaser-resellers.” 2A Areeda & Hovenkamp ¶345, at
`183. If a retailer has engaged in unlawful monopolistic
`
`conduct that has caused consumers to pay higher-than-
` competitive prices, it does not matter how the retailer
`
`structured its relationship with an upstream manufacturer
`or supplier—whether, for example, the retailer employed a
`
`markup or kept a commission.
`
`
`To be sure, if the monopolistic retailer’s conduct has not
`
`caused the consumer to pay a higher-than-competitive
`price, then the plaintiff ’s damages will be zero. Here, for
`example, if the competitive commission rate were 10 per-
`cent rather than 30 percent but Apple could prove that
`app developers in a 10 percent commission system would
`always set a higher price such that consumers would pay
`
`
`
`
`
`

`

`10
`
`
`APPLE INC. v. PEPPER
`
`Opinion of the Court
`the same retail price regardless of whether Apple’s com-
`mission was 10 percent or 30 percent, then the consumers’
`damages would presumably be zero. But we cannot as-
`sume in all cases—as Apple would necessarily have us
`do—that a monopolistic retailer who keeps a commission
`does not ever cause the consumer to pay a higher-than-
`competitive price. We find no persuasive legal or economic
`basis for such a blanket assertion.
`
`In short, we do not understand the relevance of the
`upstream market structure in deciding whether a down-
`
`stream consumer may sue a monopolistic retailer. Apple’s
`rule would elevate form (what is the precise arrangement
`between manufacturers or suppliers and retailers?) over
`substance (is the consumer paying a higher price because
`of the monopolistic retailer’s actions?). If the retailer’s
`unlawful monopolistic conduct caused a consumer to pay
`the retailer a higher-than-competitive price, the consumer
`is entitled to sue the retailer under the antitrust laws.
`
`Third, if accepted, Apple’s theory would provide a
`roadmap for monopolistic retailers to structure transac-
`tions with manufacturers or suppliers so as to evade anti-
`
`trust claims by consumers and thereby thwart effective
`antitrust enforcement.
`
`
`Consider a traditional supplier-retailer relationship, in
`which the retailer purchases a product from the supplier
`and sells the product with a markup to consumers. Under
`Apple’s proposed rule, a retailer, instead of buying the
`product from the supplier, could arrange to sell the prod-
`uct for the supplier without purchasing it from the sup-
`plier. In other words, rather than paying the supplier a
`certain price for the product and then marking up the
`
`price to sell the product to consumers, the retailer could
`collect the price of the product from consumers and remit
`only a fraction of that price to the supplier.
`
`
`That restructuring would allow a monopolistic retailer
`to insulate itself from antitrust suits by consumers, even
`
`
`
`

`

`
`
` 11
`
`
`
`
`
` Cite as: 587 U. S. ____ (2019)
`
`Opinion of the Court
`in situations where a monopolistic retailer is using its
`
`monopoly to charge higher-than-competitive prices to
`consumers. We decline to green-light monopolistic retail-
`ers to exploit their market position in that way. We refuse
`
`to rubber-stamp such a blatant evasion of statutory text
`and judicial precedent.
`In sum, Apple’s theory would disregard statutory text
`
`
`and precedent, create an unprincipled and economically
`senseless distinction among monopolistic retailers, and
`furnish monopolistic retailers with a how-to guide for
`evasion of the antitrust laws.
`C
`In arguing that the Court should transform the direct-
`
`purchaser rule into a “who sets the price” rule, Apple
`insists that the three reasons that the Court identified in
`Illinois Brick for adopting the direct-purchaser rule apply
`
`to this case—even though the consumers here (unlike in
`
`Illinois Brick) were direct purchasers from the alleged
`
`monopolist. The Illinois Brick Court listed three reasons
`for barring indirect-purchaser suits: (1) facilitating more
`
`effective enforcement of antitrust laws; (2) avoiding com-
`plicated damages calculations; and (3) eliminating dupli-
`cative damages against antitrust defendants.
`As we said in UtiliCorp, however, the bright-line rule of
`
`
`Illinois Brick means that there is no reason to ask whether
`the rationales of Illinois Brick “apply with equal force” in
`every individual case. 497 U. S., at 216. We should not
`
`engage in “an unwarranted and counterproductive exer-
`cise to litigate a series of exceptions.” Id., at 217.
`
`But even if we engage with this argument, we conclude
`that the three Illinois Brick rationales—whether consid-
`
`ered individually or together—cut strongly in the plain-
`tiffs’ favor here, not Apple’s.
`
`First, Apple argues that barring the iPhone owners from
`
`suing Apple will better promote effective enforcement of
`
`
`
`
`
`

`

`
`
`
`
`12
`
`
`APPLE INC. v. PEPPER
`
`Opinion of the Court
`the antitrust laws. Apple posits that allowing only the
`upstream app developers—and not the downstream con-
`sumers—to sue Apple would mean more effective enforce-
`ment of the antitrust laws. We do not agree. Leaving
`consumers at the mercy of monopolistic retailers simply
`because upstream suppliers could also sue the retailers
`
`makes little sense and would directly contradict the
`longstanding goal of effective private enforcement and
`consumer protection in antitrust cases.
`Second, Apple warns that calculating the damages in
`
`successful consumer antitrust suits against monopolistic
`retailers might be complicated. It is true that it may be
`
`hard to determine what the retailer would have charged in
`
`a competitive market. Expert testimony will often be
`
`necessary. But that is hardly unusual in antitrust cases.
`
`Illinois Brick is not a get-out-of-court-free card for monop-
`olistic retailers to play any time that a damages calcula-
`tion might be complicated. Illinois Brick surely did not
`wipe out consumer antitrust suits against monopolistic
`retailers from whom the consumers purchased goods or
`
`services at higher-than-competitive prices. Moreover, the
`
`damages calculation may be just as complicated in a re-
`tailer markup case as it is in a retailer commission case.
`Yet Apple apparently accepts consumers suing monopolis-
`tic retailers in a retailer markup case. If Apple accepts
`
`that kind of suit, then Apple should also accept consumers
`
`suing monopolistic retailers in a retailer commission case.
`
`Third, Apple claims that allowing consumers to sue will
` result in “conflicting claims to a common fund—the
`
`amount of the alleged overcharge.” Illinois Brick, 431
`U. S., at 737. Apple is incorrect. This is not a case where
`multiple parties at different levels of a distribution chain
`are trying to all recover the same passed-through
`overcharge initially levied by the manufacturer at the top
`of the chain. Cf. id., at 726–727; Hanover Shoe, Inc. v.
`
`United Shoe Machinery Corp., 392 U. S. 481, 483–484
`
`
`
`

`

`
`
` 13
`
`
`
` Cite as: 587 U. S. ____ (2019)
`
`Opinion of the Court
` (1968). If the iPhone owners prevail, they will be entitled
`
`
`
` to the full amount of the unlawful overcharge that they
`paid to Apple. The overcharge has not been passed on by
`anyone to anyone. Unlike in Illinois Brick, there will be
`
`no need to “trace the effect of the overcharge through each
`
`step in the distribution chain.” 431 U. S., at 741.
`It is true that Apple’s alleged anticompetitive conduct
`
`may leave Apple subject to multiple suits by different
`plaintiffs. But Illinois Brick did not purport to bar
`multiple
`liability that
`is unrelated to passing an
`overcharge down a chain of distribution. Basic antitrust
`
`
`law tells us that the “mere fact that an antitrust violation
`
`produces two different classes of victims hardly entails
`that their injuries are duplicative of one another.” 2A
`Areeda & Hovenkamp ¶339d, at 136. Multiple suits are
`not atypical when the intermediary in a distribution chain
`
`is a bottleneck monopolist or monopsonist (or both)
`
`between the manufacturer on the one end and the
`
`consumer on the other end. A retailer who is both a
`
`monopolist and a monopsonist may be liable to different
`classes of plaintiffs—both to downstream consumers and
`to upstream suppliers—when the retailer’s unlawful
`conduct affects both the downstream and upstream
`
`markets.
`Here, some downstream iPhone consumers have sued
`
`Apple on a monopoly theory. And it could be that some
`
`upstream app developers will also sue Apple on a monop-
`sony theory. In this instance, the two suits would rely on
`fundamentally different theories of harm and would not
`assert dueling claims to a “common fund,” as that term
`was used in Illinois Brick. The consumers seek damages
`
`
`based on the difference between the price they paid and
`the competitive price. The app developers would seek lost
`
`profits that they could have earned in a competitive retail
`market. Illinois Brick does not bar either category of suit.
`
`In short, the three Illinois Brick rationales do not per-
`
`
`
`
`
`
`

`

`14
`
`
`APPLE INC. v. PEPPER
`
`Opinion of the Court
`suade us to remake Illinois Brick and to bar direct-
`
`purchaser suits against monopolistic retailers who employ
`
`commissions rather than markups. The plaintiffs seek to
`hold retailers to account if the retailers engage in unlaw-
`ful anticompetitive conduct that harms consumers who
`purchase from those retail

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