Washington — As the Apple v. Pepper case heads to the Supreme Court, tech companies as well as businesses that rely on services uniting buyers and sellers are watching the outcome to see how it will impact their future business endeavors. The Computer & Communications Industry Association, which has advocated on the pro-competition side of tech antitrust cases for more than 45 years, filed an amicus brief today based on its concern that the lower court ruling threatens some internet business models by exposing these business models to duplicative damages claims.
The brief argues that the lower court failed to consider legal precedent under the Illinois Brick doctrine by granting legal standing to indirect purchasers and erroneously considering Apple as a distributor. It also points out that the current ruling would harm competition in the long run for potential new entrants and thousands of smaller businesses that rely on so-called multi-sided online business models to connect with customers in the short term.
For example, the brief explains that the “Ninth Circuit’s rule would allow an action for treble damages against any company with which the plaintiff has transacted, regardless of whether the claims arise from alleged pass-on damages, so long as that defendant can be labeled a ‘distributor.’” This puts multi-sided business models at risk of duplicate claims and conflicts with both the Court’s precedents and the Sherman Antitrust Act.
The following can be attributed to CCIA President & CEO Ed Black:
“Multi-sided business models serve as sort of matchmakers for market participants for anything from crafts to rides and now constitute a large portion of the economy. The lower court ruling erred in understanding how these business models function and ignored well-settled antitrust doctrines to come up with a ruling that would unfortunately expose these matchmakers to duplicative treble damages..”
“Rather than face this liability and high damages, companies will feel pressured to follow the single-sided model and focus on their own proprietary products, or at least reduce the number of business partners. This decrease in choices would be unfortunately for thousands of small businesses and consumers.”
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