Owners of Apple iPhones can buy apps only through the Apple App Store, which charges a 30 percent commission on all the apps purchased. The recent decision by the Supreme Court granting standing to iPhone owners is based upon an assumption that this “monopolization” of the iPhone app market harms iPhone owners.
That assumption is incorrect, for two reasons. First, the commission is equivalent analytically to a tax on app purchases; but consumers considering the purchase of an iPhone know that the availability of apps will be limited to the App Store, so that they will have to pay some part of the required commission. That knowledge must have the effect of reducing the amount that consumers are willing to pay for iPhones, so that the “monopolization” of the iPhone app market and the 30 percent commission actually have the effect of shifting revenues from iPhone sales to app sales.
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