WEBVTT - Justices Appear Skeptical in Apple Antitrust Case

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<v Speaker 1>Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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<v Speaker 1>day we bring you insight and analysis into the most

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<v Speaker 1>important legal news of the day. You can find more

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<v Speaker 1>episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud

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<v Speaker 1>and on Bloomberg dot com slash podcasts. The Supreme Court

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<v Speaker 1>is back in session today with Apple and iPhone apps.

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<v Speaker 1>The first order of business this morning. Here to tell

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<v Speaker 1>us about it is Greg Store, Bloomberg, new Supreme Court reporter. So, Greg,

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<v Speaker 1>consumers want to sue Apple, saying it's using its dominance

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<v Speaker 1>in the market to jack up the prices for iPhone apps.

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<v Speaker 1>What's the issue with that lawsuit, Julie. The issue is

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<v Speaker 1>that the Supreme Court has said in previous cases that

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<v Speaker 1>the only one who can sue under federal antrust law

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<v Speaker 1>is the direct purchaser of something. And this lawsuit focuses,

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<v Speaker 1>at least in part on the commissions that Apple charges

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<v Speaker 1>to the developers. Those are UM and UH. The consumers

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<v Speaker 1>say those are higher than they should be if there

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<v Speaker 1>were a true competition here, and so Apple's argument is

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<v Speaker 1>that the consumers are not the direct purchasers of UH.

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<v Speaker 1>These the distribution services that the commissions pay for. They say,

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<v Speaker 1>the only one who can sue us for having allegedly

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<v Speaker 1>too high commissions are the app developers, not the consumers.

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<v Speaker 1>And what does what does the consumer groups say? Well,

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<v Speaker 1>the consumers say that we ultimately end up paying the

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<v Speaker 1>cost of the commissions through higher app prices. And they

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<v Speaker 1>also say that the case is not just about the commissions,

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<v Speaker 1>It's about Apple's total control of the system for buying apps.

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<v Speaker 1>They say, Look, if you're gonna, if you have an iPhone,

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<v Speaker 1>you want to buy an app, the only place you

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<v Speaker 1>can go is the app store, and Apple at the

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<v Speaker 1>app Store has some control over the prices that that

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<v Speaker 1>developers can charge. They are charged in UH amounts ending

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<v Speaker 1>in ninety nine or a dollar ninety nine or two

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<v Speaker 1>UM and uh. The consumers say that that overall control

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<v Speaker 1>is enough that that uh it feels like you are

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<v Speaker 1>buying the app from app directly from Apple uh and

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<v Speaker 1>therefore we should be allowed to sue Apple for inflated prices.

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<v Speaker 1>So antitrust cases sometimes not always, but sometimes divide the

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<v Speaker 1>Supreme Court along ideological lines. What can you glean from

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<v Speaker 1>the justices questions this morning? So this one sort of

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<v Speaker 1>divided them along ideological lines. If the four liberal justices

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<v Speaker 1>all seemed like they were varying kind to let this

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<v Speaker 1>lawsuit go forward, uh, Justice Kavana, the newest judge, justice,

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<v Speaker 1>might join them in that. And then you had two

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<v Speaker 1>of the more conservative justices, Gorsu and Alito, and they

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<v Speaker 1>were asking a much bigger question. Uh. Justice Corsue in

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<v Speaker 1>particular was suggesting that he doesn't like this direct purchase

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<v Speaker 1>or requirement at all, and he would consider throwing out

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<v Speaker 1>the ninety seven Supreme Court ruling that that imposed the

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<v Speaker 1>direct purchaser requirement. If the court were to go that route,

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<v Speaker 1>the consumers would be allowed to to move forward with

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<v Speaker 1>their suits. So you could end up with kind of

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<v Speaker 1>a combination of rationales for letting this lawsuit go forward.

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<v Speaker 1>So we're the justices up to date on the tech

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<v Speaker 1>aspects of this, because sometimes in these arguments they're a

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<v Speaker 1>little behind the curve. Yeah, there weren't any any of

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<v Speaker 1>those moments where you're like, Wow, they really don't understand

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<v Speaker 1>what's going on here. One justice who tends to be

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<v Speaker 1>one of the more tech savvy justices, Justice Kagan uh

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<v Speaker 1>did talk about the process of buying an app on

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<v Speaker 1>her iPhone as She talked about when I, you know,

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<v Speaker 1>buy something, I'm paying you know, I go to the

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<v Speaker 1>app store, I'm paying for it using my Apple I

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<v Speaker 1>D and the credit card information stored there. So she

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<v Speaker 1>seemed to be speaking from personal experience in doing that. UH.

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<v Speaker 1>For the most part, the other questions didn't get too

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<v Speaker 1>deeply into the actual operation of smartphones. Tell us the

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<v Speaker 1>effect of a broad ruling in this case versus a

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<v Speaker 1>limited ruling, how many companies might it affect? So there

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<v Speaker 1>are a lot of companies in this uh, this internet

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<v Speaker 1>economy um uh, an awful lot of companies like eBay,

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<v Speaker 1>like et Sea, like Amazon serve as kind of the middleman.

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<v Speaker 1>They have a marketplace. UM. The consumers suing Apple say,

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<v Speaker 1>you don't have to get into the way those companies work,

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<v Speaker 1>because Apple is so different in the amount of control

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<v Speaker 1>it exercises over the app store. But it's at least

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<v Speaker 1>possible that a decision letting this lawsuit go forward could

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<v Speaker 1>make it easier for consumers trying to sue at least

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<v Speaker 1>some of those other companies, especially the ones that do

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<v Speaker 1>exercise a lot of control over the marketplaces they run.

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<v Speaker 1>Let's turn to certain requests the Justice Department is once

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<v Speaker 1>again trying to jump over the Circuit Court of Appeals

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<v Speaker 1>and asking the court to review President's Trump's ban on

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<v Speaker 1>military service by transgender people. Tell us about that. Yeah,

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<v Speaker 1>so this is a policy that the Trump administration has

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<v Speaker 1>tried to put in place, but several federal district judges

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<v Speaker 1>have blocked them from barring service by transgender people. And

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<v Speaker 1>the Trump administration has said, we need to get this

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<v Speaker 1>issue resolved very quickly, so they filed uh petitions here

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<v Speaker 1>at the Supreme Court on Friday, uh saying, don't even

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<v Speaker 1>bother waiting for the appeals court to rule. We think

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<v Speaker 1>you should take it up now so that you can

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<v Speaker 1>rule this term and and tell us by by June

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<v Speaker 1>of next year whether we can indeed bar transgender people

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<v Speaker 1>from serving in the military. How likely is it that

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<v Speaker 1>the Court would grant certain that case and and avoid

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<v Speaker 1>the Circuit Court. Well, I mean, we're speculating here, but

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<v Speaker 1>that's a highly, highly unusual thing for the Supreme Court

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<v Speaker 1>to do. It almost always wants the lower courts to

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<v Speaker 1>fully vet an issue and certainly having the federal appeals

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<v Speaker 1>courts rule on it for they take it up. On occasion,

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<v Speaker 1>the Court will do that if there's a special urgency

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<v Speaker 1>for something, or if maybe they're already considering related to

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<v Speaker 1>in a separate case and they and they just want

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<v Speaker 1>to broaden what they're thinking about. UM. You know, it

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<v Speaker 1>would be an extraordinary thing for the Supreme Court to do,

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<v Speaker 1>especially given that so far the Court has suggested it

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<v Speaker 1>wants to step carefully and move slowly when it comes

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<v Speaker 1>to some of these centerpiece issues, uh, pushed by the

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<v Speaker 1>Trump administration. Speaking of extraordinary things at the Supreme Court,

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<v Speaker 1>I have to ask you about the Chief Justice pushing

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<v Speaker 1>back on the President's criticisms of judges appointed by former

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<v Speaker 1>President Barack Obama. How out of character was that for

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<v Speaker 1>the Chief It is extremely out of character. He has

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<v Speaker 1>talked about, uh, the importance of an independent judiciary. He

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<v Speaker 1>has said that repeatedly. He has said that he doesn't

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<v Speaker 1>view judges as being partisan actors. They're not Republican judges

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<v Speaker 1>or democratic judges. He said that all before. But this

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<v Speaker 1>came in response to a question from an Associated Press

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<v Speaker 1>reporter asking whether the Chief Justice want to respond to

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<v Speaker 1>the President's criticism of the Federal District Judge and the

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<v Speaker 1>Federal Appeals Court. And so the Chief Justice put out

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<v Speaker 1>a statement, and that is something that he has never done.

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<v Speaker 1>It is uh, it is John Roberts standing up to

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<v Speaker 1>Donald Trump in a way that he hasn't before. And

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<v Speaker 1>it is certainly a fascinating dynamic that we're going to

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<v Speaker 1>be watching while the Supreme Court considers all these hot

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<v Speaker 1>button Trump administration appeals. Only that a minute here, Greg,

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<v Speaker 1>what do you think it was that led him to

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<v Speaker 1>make that statement? You know it again, we're getting a

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<v Speaker 1>little bit in the speculation. But the President uses the

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<v Speaker 1>phrase Obama judge to describe this, this federal district judge

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<v Speaker 1>who who ruled against the administration on an asylum issue.

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<v Speaker 1>That is a characterization that John Roberts really resists. Um uh.

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<v Speaker 1>He certainly understands that that. You know, judges come to

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<v Speaker 1>the court with different views. But this is a guy who,

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<v Speaker 1>in his confirmation hearing said judges should be like umpires.

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<v Speaker 1>He does not believe they should be affiliated with the

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<v Speaker 1>president who appointed them in the way the President suggested.

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<v Speaker 1>All right, thanks so much, Greg for your insights. That's

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<v Speaker 1>Greg stores Bloomberg, new Supreme Court reporter. Thanks for listening

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<v Speaker 1>to the Bloomberg Law podcast. You can subscribe and listen

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<v Speaker 1>to the show on Apple podcast, SoundCloud, and on bloomberg

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<v Speaker 1>dot com slash podcast. I'm June Brasso, this is Bloomberg. Yeah,