Lawsuit charging Apple with iPhone app monopoly gets go-ahead

LONDON, ENGLAND - AUGUST 03: A persons finger is posed next to the Whatsapp app logo on an iPhone on August 3, 2016 in London, England. (Photo by Carl Court/Getty Images) LONDON, ENGLAND - AUGUST 03: A persons finger is posed next to the Whatsapp app logo on an iPhone on August 3, 2016 in London, England. (Photo by Carl Court/Getty Images) Photo: Carl Court, Getty Images Photo: Carl Court, Getty Images Image 1 of / 1 Caption Close Lawsuit charging Apple with iPhone app monopoly gets go-ahead 1 / 1 Back to Gallery

A federal appeals court on Thursday revived a nationwide consumer lawsuit accusing Apple of monopolizing the market for iPhone apps by requiring all sales to be made through its App Store, where Apple collects a 30 percent commission.

The proposed class-action suit was filed in a Bay Area federal court in 2011 and would apply to all apps sold between 2008, when Apple created the store, and 2013.

Apple has designed a handful of the millions of apps that run on its smartphone itself, but the vast majority are created by independent developers. The Cupertino company requires that apps be downloaded and payment made through its App Store, where developers collect 70 percent of the price and Apple gets 30 percent. The court said Apple tells customers it will cancel their iPhone warranties if they download apps the company has not approved.

Nationwide, the plaintiffs say, the commissions have cost customers hundreds of millions of dollars. They seek to prohibit the commissions or to allow developers and others to make sales outside the App Store.

U.S. District Judge Yvonne Gonzalez Rogers of Oakland dismissed the suit in December 2013, saying the customers were actually buying the apps from the product developers, who then passed along the commissions to Apple. Under federal antitrust law, a product seller can be sued only by a “direct purchaser” and not by someone who buys the product down the line.

But the Ninth U.S. Circuit Court of Appeals in San Francisco ruled Thursday that customers have bought the apps directly from Apple and have a right to sue the company for alleged monopolistic practices.

“Apple is a distributor of the iPhone apps, selling them directly to purchasers through its App Store,” Judge William Fletcher said in a 3-0 ruling reinstating the suit.

Apple argued that it does not sell the apps, but instead sells software distribution services to developers, much like a shopping mall owner that leases space to stores. But Fletcher said the company, according to the allegations in the lawsuit, forbids developers from running their own stores and steers all customers to its own store.

“They’re being compelled to pay excessive prices because Apple controls that market,” said Mark Rifkin, a lawyer for the plaintiffs. He said they were pleased by the ruling and “look forward to going back and litigating the case on the merits.”

Apple and its lawyers were not immediately available for comment.

Bob Egelko is a San Francisco Chronicle staff writer. Email: begelko@sfchronicle.com Twitter: @egelko