ColdFusion - Apple is Being Sued for Billions – Tech Could Change Forever

Starting point is 00:00:00 Hi, welcome to another Cold Fusion video. Apple was no stranger to lawsuits, but the last few weeks have been rough for the company. That's because the United States Supreme Court has ruled for a customer antitrust lawsuit to go ahead against Apple. So, what has Apple done this time and why consumers suing them? In this video, we'll find out. Anti-trust laws are in place to regulate how businesses deal with each other and their customers. The reason for antitrust laws is to promote fair competition. This is mainly to stop monopolies from forming or companies taking too much of the market

Starting point is 00:00:43 and abusing their power. The issue is that some people are arguing against Apple, citing that they've effectively created a monopoly in their App Store. On Apple devices such as iPhones, if you want to download an app, the only way to currently do so is through the Apple App Store. Here, the developers of the apps pay a yearly listing fee and give Apple a third 30% commission on the sale of their app. So since you can't buy an app without the app store, it's claimed that Apple is abusing

Starting point is 00:01:11 its power to make you pay 30% more for apps than you otherwise would if the developers were allowed to sell to you directly. Apple has been facing the same class action lawsuit from customers for over eight years. The company's main defense is that they are simply the middlemen between the developers and consumers. Apple argued that if consumers had issues with prices, they should go after the developers who set the prices. However, in a 5 to 4 vote in the Supreme Court, where Brett Kavanaugh was the deciding vote,

Starting point is 00:01:39 the court voted to allow the lawsuit to go ahead. Kavanaugh stated that, quote, plaintiffs purchased apps directly from Apple and therefore are direct purchases, end quote. In short, this means that consumers were free to go after Apple. The trial and the verdict is still a while away and legal experts believe it may take three years to resolve, but it's not a good sign for Apple. the highest court in the United States decided to go through with a lawsuit, perhaps to an extent Apple's share price fell on that news.

Starting point is 00:02:10 So all of this aside, what does it mean if Apple loses this case? Potentially, it could mean that Apple may have to offer partial refunds on all iPhone apps since the iPhone was introduced in 2007. Needless to say, this would put a huge dent in Apple's cash pile. Apple has paid app developers $34 billion in $20. 2018 alone, so with numbers that large, refunding 30% of those hosting costs over the past 10 plus years would be pretty devastating for the company. Apple may also be forced to allow alternative methods for buying apps, ones where they don't take a cut. This would theoretically make apps

Starting point is 00:02:50 cheaper and more accessible to consumers. If Apple loses, then it could set a precedent for other tech platforms to be similarly sued, and this could have a knock-on effect across the whole tech sector. For example, Microsoft recently announced a discless Xbox, meaning if games are only available through their store, then Microsoft may also be accused of running a monopoly. The case even has risky implications for Amazon and Google. But even if Apple wins, the Supreme Court has removed a massive hurdle in filing antitrust lawsuits against platforms. This means that there could be more suits in the future, regardless of the outcome of this case. The landscape of tech may be altered by this lawsuit. On the other side, there have been many voices in politics and in the public

Starting point is 00:03:36 calling for the breakup of large tech companies. In a short space of time, a handful of companies have gained so much momentum that they are not only worth billions, but also hold so much control over their markets, to a point where this has never been seen before. So on the one hand, potentially this case may make it easier to break up big tech monopolies, but on the other hand, there might be some unintended consequences. It seems to me that this is really an assault on our free enterprise system because it's no-fault monopoly. Under her proposal, if you reach $25 billion in revenues, you've got to split up.

Starting point is 00:04:12 It's a drastic measure that doesn't comport with where our antitrust laws are today, could harm innovation and honestly could end up harming consumers in the long run. So this case is far from over. It's really just begun. the Supreme Court's stance has been noted. There will be an interesting minefield that tech companies will have to navigate in the coming years. They have to fight their competitors while at the same time maintain public trust. And that's a difficult line to walk. Politicians and growing public distrust will undoubtedly make this job more difficult. So what do you think? Does Apple have a monopoly on the

Starting point is 00:04:46 app market? And what do you think about the general idea of suing companies for getting too big? Let me know your thoughts in the comment section below. So an update to this video, as it was being made, some news has broken. There could be a potential antitrust investigation by the Justice Department and the Federal Trade Commission against Google, Facebook and Amazon. Google is claimed to have a monopoly in their place store and Google search. Amazon may have investigations into their low prices, and Facebook may have to let go of Instagram and WhatsApp, and also have their influence curtailed. Needless to say, this is going to be a wild ride. So thanks for watching this video. This has been Dago and you've been watching Cold Fusion.

Starting point is 00:05:30 If you're interested in topics like this and much more, you should definitely consider subscribing. Alright, so I'll catch you again soon for the next video. Cheers guys. Have a good one.

ColdFusion - Apple is Being Sued for Billions – Tech Could Change Forever

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.