• by Wendy Davis  @wendyndavis, January 12, 2017

In a defeat for Apple, a federal appellate court has revived a lawsuit accusing the company of violating antitrust laws by charging monopoly prices for iPhone apps.

The ruling, issued Thursday by the 9th Circuit Court of Appeals, restores a class-action complaint centered on Apple's app-store business model, which involves a 70-30 revenue split with developers. (Last year, Apple tweaked that formula to allow developers who offer subscriptions to retain 85% of their app's revenue after the first year.)

In a complaint initially brought in 2011, a group of iPhone users characterize Apple's 30% commission from developers as a fee charged to consumers. The users claimed that Apple was only able to charge the 30% mark-up because it controls distribution of iPhone apps.

"In a competitive environment, where developers could sell their apps on their own websites without charging Apple’s 30% mark-up and discount retailers could obtain volume discounts and sell for far less than a 30% profit, Apple would be under considerable pressure to substantially lower its 30% profit margin," the complaint alleges. "In a truly competitive iPhone apps distribution environment, Apple’s 30% margin would be simply unsustainable."

U.S. District Court Judge Yvonne Gonzalez Rogers in the Northern District of California dismissed the lawsuit in 2013, ruling that the developers -- and not iPhone users -- are the ones who pay the 30% commission.

The complaint "is fairly read to complain about a fee created by agreement and borne by the developers to pay Apple 30% from their own proceeds -- an amount which is passed-on to the consumers as part of the purchase price," Gonzalez ruled. Therefore, she said, the consumers weren't "direct" purchasers of the apps.

A three-judge panel of the 9th Circuit reversed that decision. "Apple is a distributor of the iPhone apps, selling them directly to purchasers through its App Store," the judges wrote. They added that because Apple is a "distributor," the consumers are entitled to sue the company "for allegedly monopolizing and attempting to monopolize the sale of iPhone apps."

This case isn't Apple's first brush with antitrust law. Several years ago, the company was found to have orchestrated a price-fixing conspiracy with book publishers, resulting in higher ebook prices.