Pod Insights The Vergecast The lawyer who won against Apple at the Supreme Court About this episode Apple just lost a case at the Supreme Court, and an antitrust lawsuit claiming that the App Store is a monopoly will proceed. Verge editor-in-chief Nilay Patel and senior reporter Adi Robertson speak to Mark Rifkin, one of the lawyers who argued the case against Apple. Subscribe to the Vergecast here for free in your favorite podcast appFor more on this case, check out Adi Robertson's recent work on The Verge
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Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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1:17 Nilay Patel? Hey, everybody. It's Deanna from The Vergecast. This week's interview episode is a little bit different. We're going to do two parts. First, I have Addy Robertson here. Hey, Addy. Hey. So you may have heard Apple lost a case in Supreme Court this week. The case is Apple versus Pepper. The plaintiffs were suing Apple for monopoly pricing in the App Store. They're basically saying Apple's 30% cut is overpriced. Consumers are paying it. That's a problem. And the case in the Supreme Court very narrowly was not about that. It was about whether consumers could sue Apple at all. So Addy and I actually interviewed the plaintiff's lawyer. We're going to talk to him in a minute, but it's so complicated that I just want to spend a few minutes with Addy explaining what the hell is going on.
1:59 Nilay Patel? So Addie, what the hell is going on?
2:01 Speaker 03 So this is the simple version. We will get into the more complex version later. But basically, in 2011, Robert Pepper and other people said, "Look, if you buy an iPhone, you have one choice to buy apps. Apple only will let you buy apps in its App Store, and it charges a 30% commission to developers. Therefore, these developers are probably passing the cost on to us consumers. So you have one choice. You have to buy this thing here, and this company is driving up the price." That's all going to be decided at some point far in the future, because what the last eight years have been about is whether they're allowed to sue. So there is a 1970s doctrine that was about bricks that says...
2:43 Nilay Patel? About bricks?
2:44 Speaker 03 It's called Illinois Brick.
2:45 Nilay Patel? Alright.
2:46 Speaker 03 And it says that if you are not a direct customer of someone who is running a monopoly, you cannot sue them. The idea was that if somebody gets sued for antitrust, like, literally every person who has ever dealt with them can't sue them. So in Illinois Brick, it was, okay, if you bought bricks from this guy, you can sue. If you bought a house that was bought with someone else's contract work, who then bought the bricks from someone else, you cannot sue.
3:13 Nilay Patel? You cannot sue the brick manufacturer?
3:15 Speaker 03 Yes. So Apple's argument was, "We make the bricks, and you're the people with the house. We provide a platform to developers. The developers are our customers, and you are buying things from the developers, who may or may not be charging prices that you may or may not want to pay." And this case, yesterday, the ruling said, "Look, that's ridiculous. You are engaging in a transaction with Apple, and clearly, this is not equivalent to some person far up the chain. Apple, you're just splitting hairs. Let's let this thing continue."
3:48 Nilay Patel? Yeah. The decision, I read it, was Kavanaugh and the four liberal justices, which is interesting, because Kavanaugh is not a liberal justice on the Supreme Court. But it was the four liberal justices and Kavanaugh, Kavanaugh wrote the decision. And he seemed, I would say, mad.
4:04 Speaker 03 Definitely annoyed.
4:04 Nilay Patel? Like, the last line of the decision is, this is why we have antitrust law.
4:08 Speaker 03 He accused Apple of gerrymandering.
4:10 Nilay Patel? Yeah, he's like, "Apple splitting hair." I mean, you should read it. Addie wrote a piece about it. You can read the link. It's short. It's eminently readable. I said yesterday in a tweet, Kavanaugh writes like a truck, which nobody under-- I think trucks are fine, but he's just a very blunt-- he likes beer. You know what I'm saying? Like, he's a very forthright writer. So, the short sentences, and he just barrels through them. So, it's very readable. He seemed really annoyed with Apple for trying to say, "Look, we just-- we sell to developers the access to our storefront. We don't sell apps to the consumer," which, from my perspective, is a ridiculous thing to say. Like, it's called the App Store. Consumers give their credit card to Apple.
4:52 Nilay Patel? They buy apps from Apple. If you have a customer service problem, you talk to Apple. Is there any validity to the idea that Apple should be considered the brick company in Illinois Brick?
5:04 Speaker 03 The dissent from this, which was written by Neil Gorsuch, their argument was--
5:08 Nilay Patel? The other Trump-appointed. I mean, this is wild. This is a huge split already.
5:12 Speaker 03 So, that argument basically said, "Look, there was a utility to this Illinois Brick doctrine, and the purpose was so that you aren't required to face all of these lawsuits from all these different people." So, now, Apple is, maybe the developers can sue them, maybe the customers can sue them, they don't know. And so, if you get to other, more complicated retail setups, then, yeah, you have no idea who might sue you. You might end up coming up with these extremely arcane setups to avoid liability. Like, you try to make clear that you are not the developer-- like, you are not the person the customer's dealing with in ways that make the whole system less efficient. That's the sort of counterargument.
5:53 Speaker 03 And that's also the people who oppose this, like, the App Association, some other industry groups, are basically saying, "Look, you're gonna open all these companies up to liability, and you're not really getting anything concrete in return."
6:04 Nilay Patel? Except the opportunity to sue them. That's something. Like, the plaintiffs here got something.
6:09 Speaker 03 Their argument is that the opportunity to sue them is not necessarily going to get them much. It will not make the App Store better. You will not see lower prices. Obviously, the majority of the court-- Doesn't necessarily think that.
6:20 Nilay Patel? Right.
6:21 Speaker 03 And we have no idea whether the actual monopoly claim is true yet.
6:25 Nilay Patel? There's a first part of the case, right, with AT&T involved?
6:28 Speaker 03 So this case actually grew out of multiple other cases. And originally, this launched right around the time the iPhone did. And if you remember that point, the iPhone launched exclusively on AT&T. So they were also making the case that by only being able to get data and voice service through AT&T, that was its own kind of anti-competitive behavior. That got shut down, there were more lawsuits, everything happened. And then, eight years later, we've got this case that's narrowly tailored to the App Store.
6:55 Nilay Patel? It does seem to me that saying a phone carrier shouldn't have exclusives just seems ridiculous to me. And, fine, this case has wound its way up and down the courts, it's the Supreme Court now. But so much has changed in the intervening years that suing AT&T for having an exclusive on the iPhone in 2007 was like, flatly ridiculous. But suing Apple for having a monopoly on App Store pricing in 2019 just seems of a piece with everything else that's happening right now. It seems very timely. Do they just luck out?
7:26 Speaker 03 Possibly. It is always possible that the Supreme Court is theoretically influenced by the prevailing winds of change, especially if one of the justices was appointed, like, literally, a year ago. So it's, that is theoretically possible. But there have also been antitrust cases going on for years and years.
7:46 Nilay Patel? Yeah. But there is a larger moment now, right? Elizabeth Warren wants to break up all the big tech companies. She wants to break the App Store apart from Apple. She said it very clearly. There's Spotify in suing in Europe. There is just the general backlash to Facebook existing in any way, shape, or form. Is this all of a piece? Is this a moment? Is this gonna have some, like, huge impact, do you think?
8:08 Speaker 03 Philosophically, this is definitely targeting some of the same big questions. It is also important to note that this does not have a bunch of ramifications for any reason you would sue a tech company. It's specifically dealing with one reason that people could not sue if they are part of a specific class in an antitrust case. If you want to sue Facebook for kicking you off, or... For mistreating you as a consumer, or you want to sue, or if you're a developer and you want to sue a platform, you have always been able to do that. This basically changes one specific thing. It does not change the larger landscape of the many, many, many legal challenges over various facets of tech companies.
8:47 Nilay Patel? Yeah, I think that's actually really important to note. Like, the way Supreme Court precedents work, and the way Supreme Court opinions work, is they try to be as narrowly tailored as possible. And here, we're literally applying a 70s-era precedent about the sale of bricks to the sale of applications on the iPhone. And it doesn't seem like you can spread that much wider than that at this point in time. How does this track with what's happening with Spotify in Europe? Is it the same idea, or is it different?
9:14 Speaker 03 I think that it is hard to necessarily compare the doctrines that we're dealing with here, especially because we're just dealing with literally whether you're able to sue. But Spotify, as far as I understand it, is also sort of upset about subscription models, which are subtly different. Like, at this point, Apple charges different rates for them. That's sort of in-app purchases. It's not literally whether you can put a piece of software onto the phone.
9:39 Nilay Patel? Right. Okay, so let's say, so Apple lost here, Pepper and everyone, because it's a class action. But Pepper and the plaintiff's class prevailed, they're going to sue again. Play it out, like, what happens next? And then we should talk to Mark and see what he has to say. But what do you think, like, the actual impact for consumers is going to be?
9:58 Speaker 03 So if we fast-forward through all this, and they decide, look, Apple is a monopoly, it is driving up prices, you should not be able to do this, then theoretically, Apple's going to have to come up with a new model, potentially something that is more like the Android Play Store, which we'll hear more about later, where you have one main system that is the safest place to get your apps, that's the place that most people go to, but you can also maybe sideload things, or you can maybe have an alternative app store. And also, obviously, they want money for anyone who bought an app. In the last many, many years.
10:35 Nilay Patel? Yeah, you get the feeling the lawyers here are not just after pure justice. They definitely want some cash on the deal. Okay, we come back, we're going to talk to Mark Rifkin, managing partner at Wolf Haldenstein, the law firm that just beat Apple in the Supreme Court. I gotta tell you, he's riding high. He just won at the Supreme Court. So he's, he's, he's in a good mood. And we pushed him pretty hard. So check this out.
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12:11 Nilay Patel? So I'm here with Mark Rifkin, who's managing partner at Wolf Haldenstein, and I'm joined by Addie Robertson, the Verge's senior reporter. Mark, real quick, in Apple versus Pepper, the case about App Store monopoly pricing, you represent Pepper, you represent the class. Just explain who exactly you represent.
12:29 Speaker 05 Sure, I represent the plaintiffs in the case who are iPhone customers who also bought apps for their iPhones. But I also represent, more importantly, I also represent all the purchasers, wherever they may be, who, who bought iPhone apps for their iPhones at any time since, since the phone was introduced in 2007.
12:49 Nilay Patel? So if somebody's listening to this right now, they've got an iPhone, they bought an app last week, they're theoretically in your class.
12:54 Speaker 05 They are members of the proposed class. That's right.
12:56 Nilay Patel? Well, I hope, this is Mark, this is your lawyer.
13:01 Nilay Patel? I'm sure it's nice for everyone to meet each other.
13:03 Speaker 05 It's nice to meet everybody.
13:05 Nilay Patel? You had a big win this week at the Supreme Court issued a decision. The composition of the judges on the majority is very interesting. I want to talk about that. But effectively, the Supreme Court said, you and your class, the plaintiffs have standing to sue Apple for pricing in the App Store. Can you just sort of explain how we got here and what that decision means?
13:27 Speaker 05 Sure. There's a longstanding principle in antitrust law that only a direct purchaser from an alleged monopolist has standing to sue the defendant for wrongful conduct. And that was decided in a 1977 case called Illinois Brick. So literally what the Supreme Court decided yesterday was that under Illinois Brick, iPhone owners were direct purchasers of apps from Apple and thus had standing to sue Apple for the alleged monopolization of the market for the iPhone apps.
14:05 Nilay Patel? And Apple's argument in the opposite was basically, no, you don't buy apps from us. App vendors show up, they put apps in the store, we charge them a fee, but you are fundamentally buying apps from the software developer. And the Supreme Court threw that out.
14:20 Speaker 05 Apple said that they provided distribution service to the app developers, but that we were really transacting with the app developers on the App Store. And the Supreme Court rejected that argument, saying that we shopped on the App Store where Apple forced us to shop. We paid all the money to Apple directly because that's what Apple insists. And so, under any plain language understanding of that transaction, we were direct purchasers of iPhone apps from Apple.
14:55 Nilay Patel? For most normal people kind of coming into the case, all you've gotten to is, okay, we can sue you. You haven't gotten to... Apple has a monopoly over the App Store, or that monopoly is leading to unfair outcomes, right? I mean, that's the heart of your case, but you're just at, okay, we're allowed to sue you.
15:12 Speaker 05 Correct. What we have right now is, we have the green light to be able to proceed with a litigation, but it's an important hurdle, because it was the last roadblock that we had to clear before we're able to start with Merit's Discovery, which is the part of the case where we're going to try to collect evidence from Apple to prove our claim.
15:30 Nilay Patel? So, there's been a pretty dramatic shift in the tech landscape, in how the big tech companies are perceived, between then and now. Certainly, 2007 and now is a drastic shift, but even 2011 and now, that's, it's quite a long time. The sort of antitrust activity and interest in big 10 companies is going up. You have Elizabeth Warren saying she would break up Apple or split them apart from the App Store. Is there anything, do you see that affecting the case in this moment?
16:01 Speaker 05 Yeah, I think that, as time has gone on, and we've seen, especially over the last eight years since we refiled the case in 2011, we've seen explosive growth in the App Store. And that doesn't just reflect the growth and the popularity of iPhone apps, it also reflects Apple's iron-fisted control over the distribution of the apps. If you want, the plaintiffs allege in our case, if you want to put an app on your iPhone, you have only one choice, and that's to shop for the app on the App Store. And as Justice Kavanaugh wrote in his opinion yesterday, the only other choice you have
16:46 Speaker 05 is not to put apps on your iPhone. And so, I do think that the concentration of control in the hands of a single company, whether it's Apple or any other company, is going to help us, not just to prove our case, but I think also to be able to demonstrate that this is the wrong sort of thing for e-commerce and for the economy generally.
17:11 Nilay Patel? So there's obviously some technical limitations to putting an app on a phone, right? Apple has to have a store. Are you suggesting that there should be injunctive relief and Apple should be allowed to have other stores on the phone?
17:25 Speaker 05 We are asking for an injunction to stop what we think is the unlawful monopolization of the distribution network for iPhone apps. Take the Android paradigm. You can, if you want, you can shop on Google Play for an Android app. But you don't have to. You can buy an app directly from an app developer. You can buy an app from another website. You can buy an app from many other locations. You don't need to go to Google Play to put an app on your Android device. The only reason you need to go to the App Store to put an app on your iPhone is because that's where Apple wants you to shop.
18:10 Speaker 05 And the reason for that seems pretty obvious to us. The plaintiffs allege it's so that Apple gets to charge a super competitive price for the apps.
18:19 Nilay Patel? Obviously, Apple made a bunch of arguments as to why. The first one is, this is how we validate the security and safety of iPhone customers. The second is, well, if you don't like it, you can go buy an Android phone. And the third is, and in fact, most people in the world have bought Android phones, right? The iPhone is not the dominant platform by any measure. Now that you are able to sue Apple, how are you going to attack those arguments?
18:43 Speaker 05 So let's take the last one first. This is a case that only relates to applications for the iPhone. It's what's known as a single product market. And when you make the choice to buy an iPhone or an Android phone, you lock yourself into one economy or the other. You can either start to buy Android apps for your Android phone or iPhone apps for your iPhone. But if you buy an iPhone, you can't buy Android apps and vice versa. So when you make that decision to buy the phone of your choice... You now have to shop for the apps that work on that phone, unlike the Android model where you can shop anywhere for an Android app. In the iPhone world, you have to shop at the App Store.
19:28 Speaker 05 So that's number one. Number two, with respect to the idea that what you're paying for is Apple's security features, or somehow their value add, that'll be their defense, and that'll be their justification for what they do, and we're perfectly prepared to meet that. We don't think that they'll be able to prove that they provide any significant value by forcing consumers to shop on a single source for iPhone apps, but that'll be up to them to try to prove that. And the notion that they have some small fraction of the market, it's nonsense. It makes no sense to us at all.
20:11 Nilay Patel? Why does that make no sense to you?
20:12 Speaker 05 Because they have locked the phone completely with features they built into the phone, so that if you want to shop for an iPhone app, you have no choice. You can't buy it anywhere else. You're forced to buy it on the App Store.
20:28 Nilay Patel? So you're saying that the fact that Apple only has, you know, some sub-50% share in the US is not important, right? Because they have 100% share of iPhone owners?
20:40 Speaker 05 Exactly. You've put your finger on it exactly. The fact that they have a 50% market share of smartphones doesn't mean they don't have 100% share of the distribution of iPhone apps, which they absolutely do. It is a near-complete, perfect monopoly for the market for iPhone apps, which is the relevant market in our case.
21:07 Nilay Patel? But isn't that, just to push you on this, isn't that what people are buying? This self-contained product where Apple controls the distribution? If a consumer is unhappy about this, you know, their cellphone contract is going to roll over in two years and they can just go buy an Android phone?
21:22 Speaker 05 Yeah, but you've, you've already got an enormous investment of money in, in the device itself, and you've got a significant investment of money in the, in the apps that you put on the phone, and that investment makes it much more difficult for you to switch to another, to another model. And frankly, it's no defense to a claim that Apple unlawfully monopolizes the market for iPhone apps, to say that you can switch two years from now if you want to absorb all those costs to do so. That doesn't justify Apple charging a super competitive price for apps on the, on the App Store.
22:01 Speaker 03 So how far do you think the arguments that you're making here generalize to other platforms? You'd mentioned Android, Android does things a bit different, but say, do you see someone being able to sue Android for a certain form of exclusivity? Does this generalize to, say, a gaming console? Should Microsoft be required to add sort of alternate Xbox stores?
22:18 Speaker 05 Yeah, so, so I think the answer to the question is the principles that, that we are looking at. Certainly, the, the court's decision yesterday i- is generally applicable to any other platform. It's not related to, this is not an, an Apple specific or iPhone specific decision. It's, it's a general decision, and I think for that reason, it's an important decision protecting consumer rights under the antitrust laws. The court, the majority, that is, Justice Kavanaugh, writing for the majority, said two or three times how important it is to the Supreme Court that consumers be allowed to vindicate their rights under the federal antitrust laws. So that's number one. Number two, as a practical matter, in,
23:00 Speaker 05 in the smartphone space, Apple really goes about its business quite unlike the way the Android market goes about its business. Google, for example, Google lets you buy apps for, for Google phones, and you can buy an app for a Samsung phone anywhere you want. You don't have to buy an app from, from Google Play. And so I think in the real world, right now at least, the only company that does business the way Apple does business is Apple.
23:35 Speaker 03 I mean, outside the world of phones, how much do you think that if, say, the merits of this case, you win on them, this applies to other parts of the tech industry, to, say, web platforms that are marketplaces, or, again, like I mentioned, to gaming consoles, to sort of other lockdown tech devices, how far does this go?
23:54 Speaker 05 Well, I think the principle that the court announced, that a consumer who buys directly from an alleged monopolist and pays his or her money directly to the alleged monopolist for the monopolized product, has standing to sue that defendant under the federal antitrust laws. I think that principle is a general principle, and it would apply in any e-commerce setting.
24:20 Nilay Patel? Let me make that more specific. So Addy brought up the Xbox. You can only buy Xbox games digitally from Microsoft, and then you can also, you can go buy a disc, right, from another retailer?
24:35 Speaker 03 And thus you get the discless Xbox?
24:37 Nilay Patel? Yeah, I was gonna get there. But now there is a discless Xbox that Addy just mentioned. So now there's an Xbox where you can only buy games digitally from Microsoft. Do you think those consumers, under this ruling, have standing to sue Microsoft for being a monopolist?
24:51 Speaker 05 You're gonna have to forgive me, because I don't know enough about the Xbox platform to be able to answer the question with 100% certainty. But if what you're telling me is that in order to put a game on your Xbox console, you have to buy that game from Microsoft, and you have to shop on a platform that Microsoft makes you shop, and you pay your money directly to Microsoft, I think under the court's decision in Apple versus Pepper yesterday, if there were any competitive conduct there, a consumer could sue Microsoft for that, any competitive conduct, as a direct purchaser from Microsoft.
25:36 Nilay Patel? Let me just try to make this split really clear. So before, a week ago, every Xbox had a Blu-ray drive, and you could go to Best Buy, and you could buy an optical disc and put it in Xbox. That, under your reading of the decision yesterday, means that there's two retailers for software for the Xbox, right?
25:55 Speaker 05 And they would be, presumably they would be competitors, correct?
25:58 Nilay Patel? Even though Microsoft has to approve every game that runs on the Xbox. Because you can buy the game from Best Buy, and you can buy it from Microsoft, and you can buy it from Amazon. It's fine, because there's at least some competition in the retail space. Now, there is an Xbox without a disk drive. It just came out. That one, obviously, you can only buy the games digitally from Microsoft. Because that's the only digital storefront. You're saying that would fall into this ruling theoretically?
26:27 Speaker 05 Let me see if I can be a little bit more precise about that. The principle that the court announced yesterday is just a standing principle. And that's that if someone alleges that Microsoft is a monopolist. And someone alleges that the market it monopolizes is the market for games for the Xbox console. Like, we allege that Apple is a monopolist. And we allege that the market is the market for iPhone applications. It has to be very specific. And in antitrust law, you really need to look at a couple of things. You need to look at who the monopolist is, and you need to look at what the market is. But if we're saying that the market is games for Xbox consoles.
27:12 Speaker 05 Then there's still competition because you haven't told me that there's a different market for the digital games versus the Blu-ray disc games. If there's different markets, in other words, you know what I'm saying?
27:28 Nilay Patel? Yeah.
27:28 Speaker 05 Are the same games available either digitally or on Blu-ray? Or are there different games that are available only on Blu-ray and not on the digital platform and vice versa, only on digital platform?
27:41 Nilay Patel? There are definitely some digital-only games.
27:44 Speaker 05 Yeah, the market has to include all reasonable substitute products. So if there's, if the market is purely digital and Microsoft is engaging in some kind of monopoly conduct.
27:57 Speaker 05 Then, then yes, if you're forced to buy from Microsoft and you buy your product from Microsoft and you pay your money to Microsoft and the market is just those games that Microsoft distributes electronically, then I think you have standing under the Supreme Court's decision yesterday, you would have standing to sue Microsoft for that alleged monopolization. But I'm, I don't know nearly enough about the platform or that market to be able to say whether I think there's a claim or I don't think there's a claim. It's just a question of standing. And the Supreme Court said yesterday, it's a simple, bright line test. Did the consumer buy directly from the alleged monopolist and pay his or her money directly to the alleged
28:40 Speaker 05 monopolist? If the answer to those two questions is yes, then that consumer has standing to sue that alleged monopolist. I, I can't begin to describe what the claim may be, but at least I can tell you that's the answer to the standing question.
28:54 Nilay Patel? Got it.
28:54 Speaker 05 Sorry to be so technical, but it's, it's a really narrow, technical decision that the Supreme Court reached yesterday.
29:01 Nilay Patel? No, I, I appreciate it. That's, uh, this show is, is all about nerdy out and this stuff, so it's good.
29:06 Speaker 05 Okay, good.
29:07 Nilay Patel? I actually want to ask you about the decision and the composition of the majority. You had the four liberal justices and Kavanaugh, and he actually split from Gorsuch in particular, who is regarded as an equally deeply conservative judge. How, how did you get Kavanaugh to, to come over to the liberal side of the, of the majority there?
29:27 Speaker 05 I'm always hesitant to use the, the labels liberal and conservative because I don't think that they apply equally in every setting.
29:34 Nilay Patel? Okay.
29:35 Speaker 05 And I think this is, this is a setting where, um, where Justice Kavanaugh saw an interpretation of a statute and of the Supreme Court's 42 years of precedent now, uh, under that Illinois brick rule that I told you about before, the way we saw it. And I think it's, it's the correct way to see it. The court has consistently said, we look at the, at the structure of the transaction, we look at who buys the monopolized product from whom, and, and we give standing to the person who deals directly with the alleged monopolist.
30:15 Speaker 05 And, and applying the principle, the way the court has applied it for 42 years, in this case... That points to the consumers who buy the apps from Apple on the App Store and pay their money to Apple through the App Store. They have standing, and that's exactly what the five justices on the court said yesterday. The fact that there's a disagreement about how the principle should be applied, and it seems to fall on the left-right spectrum, I think that's just coincidence. I don't think this is a liberal or conservative kind of an issue, and I don't think you can
30:55 Speaker 05 look at the opinion and say that Justice Kavanaugh switched sides in any real meaningful sense. I think it's just how you look at the statute and the case law that the Supreme Court has decided for 42 years and see how the case was decided that way.
31:10 Nilay Patel? Right now, Spotify is suing Apple in Europe for a very similar idea, right? Which is they're being illegally held out of the store, being illegally priced out of the store. That just comes from a different theory of antitrust, a different theory of competition. It's maybe started from a common predecessor with us, but it has diverged rapidly. Do you think those, is that going to help you out? You're inevitably going to end up back at the Supreme Court again when you actually litigate the merits here. Do you think that the activity in Europe is going to help you out in the United States?
31:42 Speaker 05 No, I don't think so. I think the laws and the traditions are very different. I do think that atmospherically, it helps us because everybody now is looking at Apple. And so I think from that standpoint, from the idea that, you know, Apple is coming under closer and tighter scrutiny all over the world, I think that's a helpful fact, but I don't think it helps us on the merits of the case.
32:07 Speaker 03 So if Apple offers you a settlement, let's say it's a very good settlement, do you take it, or do you want this to go all the way up the courts and set a precedent?
32:16 Speaker 05 I think what's important here is that, first of all, we set an important legal principle. We clarified an important legal principle yesterday. The Supreme Court's decision was a very important one because it's very pro-consumer, and it's very consumer-protective. In an environment where consumers are increasingly losing their rights to big corporations, I think that the Supreme Court's decision yesterday was a sea change in that trend, number one.
32:48 Speaker 05 Number two, we, we have been litigating this case for 12 years and we are committed to litigating this case through trial and all the appeals that Apple will throw our way. That said, that said, if, if Apple is prepared to provide meaningful relief to consumers that, that end the, the unlawful practice and, and compensate consumers for their injury, then we would be foolish not to listen to that kind of an approach.
33:19 Nilay Patel? So wait, I just want to be really clear about that. You said end the unlawful practice and then compensate consumers. So if Apple shows up and they do the classic class action thing where everybody got an iPhone gets $4.20, you're, that's not good enough. You want them to actually change how the iPhone works. You want them to open it up to other stores.
33:36 Speaker 05 I think they need to change the way they're doing business.
33:40 Nilay Patel? You will not settle for anything less than the button that says allow other app stores on iOS.
33:45 Speaker 05 I can't predict what the future is going to hold in this case. I don't know how the law is going to develop. I don't know how the evidence is going to unfold, but, but I will tell you that we are, we are not interested in making the problem go away for Apple. We're interested in protecting the rights of the consumers who we've been representing for 12 years.
34:05 Nilay Patel? So I just want to, I want to push on that one last time and then, you know, you've given us so much of your time. So this is how computers work now, right? There's a world like an iPhone, an Xbox, a PlayStation, largely what you are buying is access to a library of software, right? You're buying a piece of hardware that can run software that is approved and vetted by a large company on your behalf. If you buy an Amazon Fire tablet, you get the Fire Store and you don't get the Play Store. If you buy an Android phone, the vast majority of consumers is never going to hit the button that says allow software from outside the Play Store.
34:46 Nilay Patel? Mostly what they're selling, the value proposition of these devices of modern, smart, mobile devices in particular, is related to the, the existence of the store that is integrated with the device.
35:01 Speaker 05 Well, I'm not sure, I'm not sure I agree entirely with that. I, I think there are plenty of devices, computers being a perfect example. You, you don't, you don't buy, uh, when, when you buy a Dell, you, you don't, you don't buy software that's written for a Dell. You buy software that's written for a PC. And, and it's true that most software now is written for PCs and for Macs interchangeably. So that the same software is compatible with both. But I understand, I understand your question that in some instances, you're buying a system. You know, you're, you're buying a VHS or Betamax or whatever it may be. I get that. I understand that.
35:39 Nilay Patel? A smart TV that runs the Roku OS. I, I don't think that you can go out in the world and find another app store for that. I mean, like, the implication of the standing here is actually much larger than, okay, now you can sue. It basically implicates the entire model of software distribution that has arisen as physical media has gone away.
36:00 Speaker 05 But the principle here is very simple. It, it, it doesn't, just because you have a platform that, uh, software developer is going to have to be writing software for, it doesn't mean that you get to be the only place you can buy it. And it doesn't mean that you get to be, by virtue of that control, that you get to charge a, a super competitive price for it. That's, that's exactly what our antitrust laws are intended to prevent. And, and that's why, for example, you know that Microsoft had problems when it was embedding certain software in its operating system. Couldn't do it, the court said.
36:38 Speaker 05 There are limits to how much control a company like Apple can exert over the sale of secondary products that are used with the primary product that they sell, which in this case is obviously the iPhone.
36:53 Nilay Patel? Okay. The idea that we, we can litigate our way into smartphones working like laptops is actually, for Tesla's turns out, that's very interesting to me. But that, to me, it seems like the heart of the dispute that's coming, right?
37:06 Speaker 05 I think it's a, a major feature of, of the case is the extent to which Apple is entitled to control not, not just the software that runs on its device, but also the sale of that software.
37:19 Nilay Patel? Yeah.
37:20 Speaker 05 And that, that's the issue that we're litigating.
37:23 Nilay Patel? Okay. So the Supreme Court says, all right, you have standing. What happens next? You're back in the district court? What's the next turn for people who are watching?
37:31 Speaker 05 Well, technically, technically, we have a shortstop in the Court of Appeals because that's where the that's where the case last was when Apple petitioned for the Supreme Court to hear the appeal. So it goes back to the Ninth Circuit and then it will only spend a short time there before the Ninth Circuit sends it back to the district court where we will then resume the litigation.
37:52 Nilay Patel? And that you're full on into discovery now? What's the next step?
37:56 Speaker 05 Then it's it's my belief that that we will go back and we will begin merits discovery. That's right.
38:03 Nilay Patel? Very exciting. How long do you think this is going to take? You started in 2007, it's 2019. Do we get a resolution in 2020 or are we looking at 2029?
38:11 Speaker 05 Well, let's hope it's not 2029, but but I think 2020 is probably ambitious for the case to to run its full course. But let's hope it's closer to 2021 than it is to 2028.
38:25 Nilay Patel? You think if Elizabeth Warren wins the presidency and implements her plan to break apart all the big tech companies, including Apple, she told me directly, that that would kind of end your case?
38:37 Speaker 05 I don't know whether that's Elizabeth Warren's plan or not, but I'll take your word for it. Number two, if she breaks up Apple, that's all well and good. It doesn't it doesn't do anything to compensate the consumers we represent for the billions of dollars they've had to pay in super competitive prices for the last 12 years. So so the answer would be no.
38:56 Nilay Patel? Got it. Okay, well, Mark, thank you so much for all of the time and hopefully, as this case goes on, we'll get we'll get to talk to you again.
39:02 Speaker 05 Of course. Okay, it's a pleasure. Thank you very much for your interest in the case.
39:07 Nilay Patel? All right, well, that was Mark Rifkin from Wolf Holstein. He's we're going to have him back. He was fun to talk to. Thank you to Addie. Thanks, Addie. Fun to talk about. Addie is reporting on this for The Verge. You can see her articles in the show notes. I get the feeling we're going to be doing a lot more reporting on antitrust in tech, so watch out for Addie on that. Big News, Why'd You Push That Button with Caitlin and Ashley is back this week with season four. They're just going for it to start season four. They're talking about blue bubbles versus green bubbles and Dieter Bohn. Is on that episode. So check that out. That's in the podcast stores, which are not Monopoly and literally any podcast store. You can just go get it. So check it out. It's really fun. Okay. And you can subscribe to the Vergecast for free on your favorite podcast app or you just tap the link in the show notes to get new episodes. And please,
39:50 Nilay Patel? Monopoly or not, just leave a rating and review on Apple Podcasts. We're doing some new thing to track our show. So we'd love it if you give us five stars and a review on Apple Podcasts. We'll be back on Friday to discuss all the other things that are happening in tech, which is this week is nuts. So we'll see you on Friday.
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