Why Apple’s Supreme Court Loss Puts Tech Giant’s Cash Cow at ‘Serious Risk’

Tech giant could pay billions to settle complaints that its 30% cut of App Store sales forced developers to charge artificially inflated prices

Apple could have a big, costly problem on its hands, after the U.S. Supreme Court ruled against the tech giant on Monday, allowing an antitrust lawsuit that argues the company uses monopoly power to drive up the cost of apps to move forward.

“The floodgates to litigation are now open,” CREATV Media chairman Peter Csathy said, noting that more app developers are likely to file claims that Apple behaved anticompetitively and essentially forced them to raise prices to cover Apple’s automatic 30% commission fee on App Store purchases.

“Apple will be challenged, and different courts will reach different results,” Csathy said. “But, one result is certain. Apple’s 30% cash cow is now at risk. Serious risk. And, yes, that presents real strategic business risk to Apple and its shareholders.”

The fees that Apple’s collects from apps has added up for the Cupertino, California, based company. The Service business — a catch-all sector that includes App Store purchases, music and movie sales, and cloud storage, among other offerings — brought in a record $11.5 billion in revenue during its most recent quarter.

Oops! This is for WrapPRO members only, please sign up or login to view.
Oops! This is a Members Only post! Become a member to access!

Join WrapPRO for Exclusive Content, Full Video Access, Premium Events, and More!

For Only $1/Day Members Access:

In-Depth Coverage
  • 5 exclusive members-only stories a week
  • Digital Video industry analysis and deep-dive features
  • Daily WrapPRO newsletter covering the latest digital video industry news
Exclusive Video
  • Access to full length Members-Only Video archive
  • Video of notable sessions from TheWrap Events (TheGrill, Power Women Summit)
Vip Access
  • VIP seating for TheWrap's Screening Series with stars and filmmakers
  • Access to 'chill spots' at select industry events Sundance, TIFF, Newfronts and more
  • Access to exclusive invite-only events
  • DataBank showcasing key stats and streaming video trends in the OTT market
  • In-depth entertainment industry research and whitepapers
Sean Burch

Tech reporter • sean.burch@thewrap.com • @seanb44