Apple Inc. v. Pepper

Summary

Respondents, who purchased apps for their iPhones though Apple’s App Store, were direct purchasers from Apple under Illinois Brick Co. v. Illinois, 431 U. S. 720, and may sue Apple for allegedly monopolizing the retail market for the sale of iPhone apps.

Text

1 (Slip Opinion) OCTOBER TERM, 2018 
Syllabus 
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is 
being done in connection with this case, at the time the opinion is issued. 
The syllabus constitutes no part of the opinion of the Court but has been 
prepared by the Reporter of Decisions for the convenience of the reader. 
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. 
SUPREME COURT OF THE UNITED STATES 
Syllabus 
APPLE INC. v. PEPPER ET AL. 
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR 
THE NINTH CIRCUIT 
No. 17–204. Argued November 26, 2018—Decided May 13, 2019 
Apple Inc. sells iPhone applications, or apps, directly to iPhone owners
through its App Store—the only place where iPhone owners may law-
fully buy apps. Most of those apps  are created by independent devel -
opers under contracts with Apple. Apple charges the developers a 
$99 annual membership fee, allows th em to set the retail price of the
apps, and charges a 30% commission on every app sale.  Respond-
ents, four iPhone owners, sued Apple, alleging that the company has
unlawfully monopolized the aftermarket for iPhone apps.  Apple
moved to dismiss, arguing that th e iPhone owners could not sue be -
cause they were not direct purchasers from Apple under Illinois Brick 
Co. v. Illinois, 431 U. S. 720.  The District Court agreed, but the 
Ninth Circuit reversed, concluding that the iPhone owners were di-
rect purchasers because they purchased apps directly from Apple. 
Held: Under Illinois Brick, the iPhone owners were direct purchasers 
who may sue Apple for alleged monopolization.  Pp. 4–14.
(a) This straightforward conclusion follows from the text of the an-
titrust laws and from this Court’s precedent.  Section 4 of the Clayton 
Act provides that “any person who shall be injured in his business or
property by reason of anything fo rbidden in the antitrust laws may 
sue.”  15 U. S. C. §15(a).  That broad text readily covers consumers 
who purchase goods or services at higher-tha n-competitive prices 
from an allegedly monopolistic retaile r.  Applying §4, this Court has 
consistently stated that “the immediate buyers from the alleged anti-
trust violators” may maintain a suit against the antitrust violators, 
Kansas v. UtiliCorp United Inc., 497 U. S. 199, 207, but has ruled 
that indirect purchasers who are two or more steps removed from the
violator in a distribution chain ma y not sue.  Unlike the consumer in 
Illinois Brick, the iPhone owners here are not consumers at the bot-

2 APPLE INC. v. PEPPER 
Syllabus 
tom of a vertical distribution chain who are attempting to sue manu-
facturers at the top of the chain.  The absence of an intermediary in
the distribution chain between Apple and the consumer is dispositive.  
Pp. 4–7.
(b) Apple argues that Illinois Brick  allows consumers to sue only
the party who sets the retail price, whether or not the party sells the
good or service directly to the co mplaining party.  But that theory 
suffers from three main problems.  First, it contradicts statutory text 
and precedent by requir ing the Court to rewrite the rationale of Illi-
nois Brick and to gut its longstanding bright-line rule.  Any ambigui-
ty in Illinois Brick should be resolved in the direction of the statutory
text, which states that “any person” injured by an antitrust violation 
may sue to recover damages.  Second, Apple’s theory is not persua-
sive economically or legally.  It would draw an arbitrary and unprin-
cipled line among retailers based on their financial arrangements 
with their manufacturers or suppliers.  And it would permit a con-
sumer to sue a monopolistic retaile r when the retailer set the retail 
price by marking up the price it had paid the manufacturer or suppli-
er for the good or service but no t when the manufacturer or supplier
set the retail price and the retailer took a commission on each sale. 
Third, Apple’s theory would provide a roadmap for monopolistic re-
tailers to structure transactions with manufacturers or suppliers so 
as to evade antitrust claims by consumers and thereby thwart effec -
tive antitrust enforcement.  Pp. 7–11.
(c) Contrary to Apple’s argument, the three Illinois Brick rationales 
for adopting the direct-purchaser rule cut strongly in respondents’ fa -
vor. First, Apple posits that allo wing only the upstream app develop-
ers—and not the downstream cons umers—to sue Apple would mean 
more effective antitrust enforcement.  But that makes little sense, 
and it would directly contradict the longstanding goal of effective pri-
vate enforcement and consumer prot ection in antitrust cases.  Sec -
ond, Apple warns that calculating the damages in successful consum -
er antitrust suits against monopolistic retailers might be 
complicated.  But Illinois Brick is not a get-out-of-court-free card for 
monopolistic retailers to play any time that a damages calculation 
might be complicated.  Third, Apple claims that allowing consumers 
to sue will result in “conflicting claims to a common fund—the 
amount of the alleged overcharge.” Illinois Brick, 431 U. S., at 737. 
But this is not a case where multiple parties at different levels of a
distribution chain are trying to recover the same passed-through 
overcharge initially levied by th e manufacturer at the top of the
chain, cf. id., at 726–727.  Pp. 11–14.
 846 F. 3d 313, affirmed.

3 Cite as: 587 U. S. ____ (2019) 
Syllabus
 KAVANAUGH, J., delivered the opinion of the Court, in which G INS-
BURG, BREYER, SOTOMAYOR, and KAGAN, JJ., joined.  GORSUCH, J., filed a 
dissenting opinion, in which ROBERTS, C. J., and THOMAS and ALITO, JJ., 
joined.

_________________ 
_________________ 
1 Cite as: 587 U. S. ____ (2019) 
Opinion of the Court 
NOTICE: This opinion is subject to formal revision before publication in 
the preliminary print of the United States Reports. Readers are requested 
to notify the Reporter of Decisions, Supreme Court of the United States, 
Washington, D. C. 20543, of any typographical or other formal errors, in 
order that corrections may be made before the preliminary print goes to 
press. 
SUPREME COURT OF THE UNITED STATES 
No. 17–204 
APPLE INC., PETITIONER v. ROBERT PEPPER, ET AL. 
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 
APPEALS FOR THE NINTH CIRCUIT 
[May 13, 2019] 
JUSTICE KAVANAUGH delivered the opinion of the Court. 
In 2007, Apple started selling iPhones.  The next year, 
Apple launched the retail App Store, an electronic store 
where iPhone owners can purchase iPhone applications
from Apple.  Those “apps” enable iPhone owners to send
messages, take photos, watch videos, buy clothes, order 
food, arrange transportation, purchase concert tickets,
donate to charities, and the list goes on.  “There’s an app
for that” has become part of the 21st-century American 
lexicon. 
In this case, however, several consumers contend that 
Apple charges too much for a pps.  The consumers argue,
in particular, that Apple has monopolized the retail mar-
ket for the sale of apps and has unlawfully used its mo-
nopolistic power to charge  consumers higher-than-
competitive prices.
A claim that a monopolistic retailer (here, Apple) has
used its monopoly to overcharge consumers is a classic 
antitrust claim. But Apple asserts that the consumer-
plaintiffs in this case may not sue Apple because they 
supposedly were not “direct purchasers” from Apple under
our decision in Illinois Brick Co . v. Illinois , 431 U. S. 720,

2 APPLE INC. v. PEPPER 
Opinion of the Court 
745–746 (1977). We disagree. The plaintiffs purchased 
apps directly from Apple and therefore are direct purchas-
ers under Illinois Brick . At this early pleadings stage of 
the litigation, we do not assess the merits of the plaintiffs’ 
antitrust claims against Apple, nor do we consider any 
other defenses Apple might have.  We merely hold that the 
Illinois Brick direct-purchaser rule does not bar these 
plaintiffs from suing Apple under the antitrust laws.  We 
affirm the judgment of the U. S. Court of Appeals for the
Ninth Circuit. 
I 
In 2007, Apple began selling iPhones. In July 2008,
Apple started the App Store.  The App Store now contains 
about 2 million apps that iPhone owners can download.
By contract and through technological limitations, the App 
Store is the only place where iPhone owners may lawfully 
buy apps.
For the most part, Apple does not itself create apps.
Rather, independent app developers create apps. Those 
independent app developers th en contract with Apple to 
make the apps available to iPhone owners in the App 
Store. 
Through the App Store, Apple sells the apps directly to
iPhone owners. To sell an app in the App Store, app de -
velopers must pay Apple a $99 annual membership fee. 
Apple requires that the retail sales price end in $0.99, but 
otherwise allows the app develope rs to set the retail price.
Apple keeps 30 percent of the sales price, no matter what 
the sales price might be.  In other words, Apple pockets a 
30 percent commission on every app sale.
In 2011, four iPhone owners sued Apple. They allege
that Apple has unlawfully monopolized “the iPhone apps
aftermarket.”  App. to Pet. for Cert. 53a.  The plaintiffs
allege that, via the App Store,  Apple locks iPhone owners
“into buying apps only from Apple and paying Apple’s 30%

3 Cite as: 587 U. S. ____ (2019) 
Opinion of the Court 
fee, even if ” the iPhone owners wish “to buy apps else-
where or pay less.” Id., at 45a. According to the com-
plaint, that 30 percent commission is “pure profit” for 
Apple and, in a competitive environment with other retail-
ers, “Apple would be under considerable pressure to sub -
stantially lower its 30% profit margin.” Id., at 54a–55a. 
The plaintiffs allege that in a competitive market, they 
would be able to “choose between Apple’s high-priced App
Store and less costly alternatives.”  Id., at 55a.  And they
allege that they have “paid more for their iPhone apps 
than they would have paid in  a competitive market.”  Id., 
at 53a. 
Apple moved to dismiss the complaint, arguing that the
iPhone owners were not direct purchasers from Apple and 
therefore may not sue. In Illinois Brick, this Court held 
that direct purchasers may sue antitrust violators, but 
also ruled that indirect purchasers may not sue. The 
District Court agreed with Apple and dismissed the com -
plaint. According to the Dis trict Court, the iPhone owners
were not direct purchasers from Apple because the app
developers, not Apple, set the consumers’ purchase price. 
The Ninth Circuit reversed.  The Ninth Circuit concluded 
that the iPhone owners were direct purchasers under 
Illinois Brick  because the iPhone owners purchased apps
directly from Apple.  According to the Ninth Circuit, Illi-
nois Brick means that a consumer may not sue an alleged 
monopolist who is two or more steps removed from the
consumer in a vertical distribution chain. See In re Apple 
iPhone Antitrust Litig. , 846 F. 3d 313, 323 (2017).  Here, 
however, the consumers purch ased directly from Apple, 
the alleged monopolist.  Therefore, the Ninth Circuit held 
that the iPhone owners could sue Apple for allegedly 
monopolizing the sale of iPhone apps and charging higher -
than-competitive prices. Id., at 324. We granted certiorari. 
585 U. S. ___ (2018).

4 APPLE INC. v. PEPPER 
Opinion of the Court 
II 
A 
The plaintiffs’ allegations boil down to one straightfor-
ward claim: that Apple exercises monopoly power in the
retail market for the sale of apps and has unlawfully used
its monopoly power to force iPhone owners to pay Apple
higher-than-competitive prices for apps.  According to the
plaintiffs, when iPhone owners want to purchase an app,
they have only two options: (1) buy the app from Apple’s
App Store at a higher-than-comp etitive price or (2) do not 
buy the app at all. Any iPhone owners who are dissatis-
fied with the selection of apps available in the App Store
or with the price of the apps available in the App Store are 
out of luck, or so the plaintiffs allege. 
The sole question presented at this early stage of the
case is whether these consumers are proper plaintiffs for 
this kind of antitrust suit—in particular, our precedents
ask, whether the consumers were “direct purchasers” from
Apple. Illinois Brick, 431 U. S., at 745–746.  It is undis -
puted that the iPhone owners bought the apps directly
from Apple.  Therefore, under Illinois Brick , the iPhone 
owners were direct purchasers who may sue Apple for 
alleged monopolization.
That straightforward conclusion follows from the text of
the antitrust laws and from our precedents.
First is text: Section 2 of the Sherman Act makes it 
unlawful for any person to “monopolize, or attempt to 
monopolize, or combine or cons pire with any other person
or persons, to monopolize any part of the trade or com-
merce among the several States, or with foreign nations.”
26 Stat. 209, 15 U. S. C. §2.  Section 4 of the Clayton Act
in turn provides that “ any person who shall be injured in
his business or property by reason of anything forbidden in
the antitrust laws may sue . . . the defendant . . . and shall 
recover threefold the damages by him sustained, and the 
cost of suit, including a reasonable attorney’s fee.”  38

5 Cite as: 587 U. S. ____ (2019) 
Opinion of the Court 
Stat. 731, 15 U. S. C. §15(a) (emphasis added).  The broad 
text of §4—“any person” who has been “injured” by an
antitrust violator may sue—readily covers consumers who 
purchase goods or services at higher-than-competitive
prices from an allegedly monopolistic retailer. 
Second is precedent: Applying §4, we have consistently 
stated that “the immediate buyers from the alleged anti-
trust violators” may maintain a suit against the antitrust 
violators. Kansas v. UtiliCorp United Inc ., 497 U. S. 199, 
207 (1990); see also Illinois Brick , 431 U. S., at 745–746. 
At the same time, incorporating principles of proximate
cause into §4, we have ruled that indirect  purchasers who
are two or more steps removed from the violator in a 
distribution chain may not sue. Our decision in Illinois 
Brick established a bright-line rule that authorizes suits 
by direct purchasers but bars suits by indirect purchasers. 
Id., at 746.
1 
The facts of Illinois Brick  illustrate the rule.  Illinois 
Brick Company manufactured and distributed concrete 
blocks. Illinois Brick sold the blocks primarily to masonry 
contractors, and those contracto rs in turn sold masonry
structures to general contracto rs.  Those general contrac-
tors in turn sold their services for larger construction
projects to the State of Illinois, the ultimate consumer of 
the blocks. 
The consumer State of Illinois sued the manufacturer 
Illinois Brick.  The State alleged that Illinois Brick had 
engaged in a conspiracy to fix the price of concrete blocks.
According to the complaint, the State paid more for the 
concrete blocks than it would have paid absent the price-
fixing conspiracy. The mono poly overcharge allegedly 
flowed all the way down the distribution chain to the 
—————— 
1 Illinois Brick held that the direct-purch aser requirement applies to
claims for damages. Illinois Brick did not address injunctive relief, and
we likewise do not address injunctive relief in this case.

6 APPLE INC. v. PEPPER 
Opinion of the Court 
ultimate consumer, who was the State of Illinois. 
This Court ruled that the State could not bring an anti-
trust action against Illinois Brick, the alleged violator,
because the State had not purchased concrete blocks 
directly from Illinois Brick.  The proper plaintiff to bring 
that claim against Illinois Brick, the Court stated, would 
be an entity that had purchased directly from Illinois 
Brick.  Ibid. 
The bright-line rule of Illinois Brick , as articulated in 
that case and as we reiterated in UtiliCorp, means that 
indirect purchasers who are two or more steps removed
from the antitrust violator in a distribution chain may not 
sue. By contrast, direct purchasers—that is, those who 
are “the immediate buyers from the alleged antitrust
violators”—may sue. UtiliCorp, 497 U. S., at 207. 
For example, if manufacturer A sells to retailer B, and 
retailer B sells to consumer C, then C may not sue A.  But 
B may sue A if A is an antitrust violator. And C may sue 
B if B is an antitrust violator.  That is the straightforward 
rule of Illinois Brick . See Loeb Industries, Inc. v. Sumi-
tomo Corp., 306 F. 3d 469, 481–482 (CA7 2002) (Wood, J.).
2 
In this case, unlike in Illinois Brick, the iPhone owners 
are not consumers at the bottom of a vertical distribution 
chain who are attempting to sue manufacturers at the top
of the chain. There is no intermediary in the distribution
chain between Apple and the consumer. The iPhone 
owners purchase apps directly from the retailer Apple,
who is the alleged antitrust violator. The iPhone owners 
pay the alleged overcharge dire ctly to Apple.  The absence 
of an intermediary is dispositive. Under Illinois Brick, the 
—————— 
2 Thirty States and the Distri ct of Columbia filed an amicus brief 
supporting the plaintiffs, and they argue that C should be able to sue A 
in that hypothetical.  Th ey ask us to overrule Illinois Brick  to allow 
such suits. In light of our ruling in favor of the plaintiffs in this case, 
we have no occasion to consider that argument for overruling Illinois 
Brick.

7 Cite as: 587 U. S. ____ (2019) 
Opinion of the Court 
iPhone owners are direct purchasers from Apple and are
proper plaintiffs to maintain this antitrust suit. 
B 
All of that seems simple enough.  But Apple argues
strenuously against that seemingly simple conclusion, and 
we address its arguments carefully. For this kind of re-
tailer case, Apple’s theory is that Illinois Brick allows 
consumers to sue only the party who sets the retail price,
whether or not that party sells the good or service directly
to the complaining party. Apple says that its theory ac -
cords with the economics of the transaction. Here, Apple 
argues that the app developers, not Apple, set the retail 
price charged to consumers, which according to Apple
means that the consumers may not sue Apple.
We see three main problems with Apple’s “who sets the 
price” theory. 
First, Apple’s theory contradicts statutory text and 
precedent. As we explained above, the text of §4 broadly 
affords injured parties a right to sue under the antitrust
laws. And our precedent in Illinois Brick established a 
bright-line rule where direct purchasers such as the con -
sumers here may sue antitrust violators from whom they 
purchased a good or service.  Illinois Brick, as we read the 
opinion, was not based on an economic theory about who 
set the price. Rather, Illinois Brick sought to ensure an
effective and efficient litigation scheme in antitrust cases. 
To do so, the Court drew a bright line that allowed direct 
purchasers to sue but barred indirect purchasers from 
suing. When there is no intermediary between the pur-
chaser and the antitrust violator, the purchaser may sue.
The Illinois Brick  bright-line rule is grounded on the
“belief that simplified administration improves antitrust
enforcement.”  2A P. Areeda, H. Hovenkamp, R. Blair, & 
C. Durrance, Antitrust Law ¶346e, p. 194 (4th ed. 2014) 
(Areeda & Hovenkamp).  Apple’s theory would require us

8 APPLE INC. v. PEPPER 
Opinion of the Court 
to rewrite the rationale of Illinois Brick  and to gut the 
longstanding bright-line rule.
To the extent that Illinois Brick  leaves any ambiguity 
about whether a direct purchaser may sue an antitrust 
violator, we should resolve that ambiguity in the direction 
of the statutory text. And under the text, direct purchas -
ers from monopolistic retailers are proper plaintiffs to sue 
those retailers. 
Second, in addition to deviating from statutory text and 
precedent, Apple’s proposed rule is not persuasive econom -
ically or legally. Apple’s effort to transform Illinois Brick 
from a direct-purchaser rule to a “who sets the price” rule 
would draw an arbitrary and unprincipled line among 
retailers based on retailers’ financial arrangements with
their manufacturers or suppliers. 
In the retail context, the price charged by a retailer to a
consumer is often a result (at least in part) of the price 
charged by the manufacturer or supplier to the retailer, or 
of negotiations between the manufacturer or supplier and
the retailer. Those agreements between manufacturer or 
supplier and retailer may take myriad forms, including for
example a markup pricing model or a commission pricing 
model. In a traditional markup pricing model, a hypothet-
ical monopolistic retailer might pay $6 to the manufacturer 
and then sell the product for $10, keeping $4 for itself.  In 
a commission pricing model, the retailer might pay noth -
ing to the manufacturer; agree with the manufacturer that 
the retailer will sell the product for $10 and keep 40 per-
cent of the sales price; and then sell the product for $10,
send $6 back to the manufacturer, and keep $4.  In those 
two different pricing scenarios, everything turns out to be
economically the same for the manufacturer, retailer, and 
consumer. 
Yet Apple’s proposed rule would allow a consumer to sue
the monopolistic retailer in the former situation but not
the latter. In other words, under Apple’s rule a consumer

9 Cite as: 587 U. S. ____ (2019) 
Opinion of the Court 
could sue a monopolistic retailer when the retailer set the
retail price by marking up the price it had paid the manu-
facturer or supplier for the good or service.  But a consumer 
could not sue a monopolistic retailer when the manufac-
turer or supplier set the retail price and the retailer took a
commission on each sale. 
Apple’s line-drawing does not make a lot of sense, other 
than as a way to gerrymander Apple out of this and simi -
lar lawsuits. In particular, we  fail to see why the form of 
the upstream arrangement between the manufacturer or
supplier and the retailer should determine whether a 
monopolistic retailer can be sued by a downstream con-
sumer who has purchased a good or service directly from 
the retailer and has paid a higher-than-competitive price
because of the retailer’s unlawful monopolistic conduct.
As the Court of Appeals aptly stated, “the distinction 
between a markup and a commission is immaterial.”  846 
F. 3d, at 324. A leading antitrust treatise likewise states: 
“Denying standing because ‘title’ never passes to a broker 
is an overly lawyered approa ch that ignores the reality
that a distribution system t hat relies on brokerage is 
economically indistinguishable from one that relies on
purchaser-resellers.” 2A Areeda & Hovenkamp ¶345, at 
183. If a retailer has engaged in unlawful monopolistic 
conduct that has caused consumers to pay higher-than -
competitive prices, it does not matter how the retailer 
structured its relationship with an upstream manufacturer 
or supplier—whether, for example, the retailer employed a 
markup or kept a commission.
To be sure, if the monopolistic retailer’s conduct has not
caused the consumer to pay a higher-than-competitive 
price, then the plaintiff ’s damages will be zero. Here, for 
example, if the competitive commission rate were 10 per-
cent rather than 30 percent but Apple could prove that 
app developers in a 10 percent commission system would 
always set a higher price such that consumers would pay

10 APPLE INC. v. PEPPER 
Opinion of the Court 
the same retail price regardless of whether Apple’s com-
mission was 10 percent or 30 percent, then the consumers’ 
damages would presumably be zero.  But we cannot as -
sume in all cases—as Apple would necessarily have us 
do—that a monopolistic retailer who keeps a commission 
does not ever cause the consumer to pay a higher-than -
competitive price. We find no persuasive legal or economic 
basis for such a blanket assertion. 
In short, we do not understand the relevance of the 
upstream market structure in  deciding whether a down-
stream consumer may sue a monopolistic retailer.  Apple’s
rule would elevate form (what is the precise arrangement 
between manufacturers or suppliers and retailers?) over
substance (is the consumer paying a higher price because 
of the monopolistic retailer’s actions?).  If the retailer’s 
unlawful monopolistic conduct caused a consumer to pay 
the retailer a higher-than-competitive price, the consumer
is entitled to sue the retailer under the antitrust laws. 
Third, if accepted, Apple’s theory would provide a
roadmap for monopolistic reta ilers to structure transac -
tions with manufacturers or suppliers so as to evade anti-
trust claims by consumers and thereby thwart effective
antitrust enforcement. 
Consider a traditional supplier-retailer relationship, in
which the retailer purchases a product from the supplier 
and sells the product with a markup to consumers.  Under 
Apple’s proposed rule, a retailer, instead of buying the
product from the supplier, could arrange to sell the prod-
uct for the supplier without purchasing it from the sup- 
plier. In other words, rather than paying the supplier a 
certain price for the product and then marking up the 
price to sell the product to consumers, the retailer could
collect the price of the product from consumers and remit 
only a fraction of that price to the supplier.
That restructuring would allow a monopolistic retailer
to insulate itself from antitru st suits by consumers, even

11 Cite as: 587 U. S. ____ (2019) 
Opinion of the Court 
in situations where a monopolistic retailer is using its
monopoly to charge higher-than-competitive prices to 
consumers. We decline to green-light monopolistic retail-
ers to exploit their market position in that way.  We refuse 
to rubber-stamp such a blatant evasion of statutory text 
and judicial precedent.
In sum, Apple’s theory would disregard statutory text
and precedent, create an unprincipled and economically 
senseless distinction among monopolistic retailers, and
furnish monopolistic retailers with a how-to guide for
evasion of the antitrust laws. 
C 
In arguing that the Court should transform the direct-
purchaser rule into a “who sets the price” rule, Apple 
insists that the three reasons that the Court identified in 
Illinois Brick for adopting the direct-purchaser rule apply
to this case—even though the consumers here (unlike in 
Illinois Brick ) were direct purchasers from the alleged 
monopolist.  The Illinois Brick Court listed three reasons 
for barring indirect-purchaser suits: (1) facilitating more
effective enforcement of antitrust laws; (2) avoiding com-
plicated damages calculations; and (3) eliminating dupli-
cative damages against antitrust defendants. 
As we said in UtiliCorp, however, the bright-line rule of 
Illinois Brick means that there is no reason to ask whether 
the rationales of Illinois Brick “apply with equal force” in 
every individual case. 497 U. S., at 216. We should not 
engage in “an unwarranted and counterproductive exer -
cise to litigate a series of exceptions.” Id., at 217. 
But even if we engage with this argument, we conclude
that the three Illinois Brick rationales—whether consid-
ered individually or together —cut strongly in the plain-
tiffs’ favor here, not Apple’s. 
First, Apple argues that barring the iPhone owners from
suing Apple will better promote effective enforcement of

12 APPLE INC. v. PEPPER 
Opinion of the Court 
the antitrust laws. Apple posits that allowing only the
upstream app developers—and not the downstream con-
sumers—to sue Apple would mean more effective enforce-
ment of the antitrust laws.  We do not agree. Leaving
consumers at the mercy of monopolistic retailers simply 
because upstream suppliers could also sue the retailers 
makes little sense and woul d directly contradict the 
longstanding goal of effecti ve private enforcement and 
consumer protection in antitrust cases. 
Second, Apple warns that calculating the damages in 
successful consumer antitrust suits against monopolistic 
retailers might be complicated.  It is true that it may be
hard to determine what the retailer would have charged in
a competitive market. Expert testimony will often be 
necessary. But that is hardly unusual in antitrust cases. 
Illinois Brick is not a get-out-of-court-free card for monop-
olistic retailers to play any time that a damages calcula-
tion might be complicated. Illinois Brick surely did not
wipe out consumer antitrust suits against monopolistic 
retailers from whom the consumers purchased goods or
services at higher-than-competi tive prices.  Moreover, the 
damages calculation may be just as complicated in a re-
tailer markup case as it is in a retailer commission case.
Yet Apple apparently accepts consumers suing monopolis-
tic retailers in a retailer ma rkup case.  If Apple accepts
that kind of suit, then Apple should also accept consumers
suing monopolistic retailers in a retailer commission case. 
Third, Apple claims that allowing consumers to sue will 
result in “conflicting claims to a common fund—the 
amount of the alleged overcharge.”  Illinois Brick , 431 
U. S., at 737.  Apple is incorrect. This is not a case where 
multiple parties at different levels of a distribution chain 
are trying to all recover the same passed-through 
overcharge initially levied by the manufacturer at the top 
of the chain. Cf. id., at 726–727; Hanover Shoe, Inc.  v. 
United Shoe Machinery Corp. , 392 U. S. 481, 483–484

13 Cite as: 587 U. S. ____ (2019) 
Opinion of the Court 
(1968). If the iPhone owners prevail, they will be entitled
to the full amount of the unlawful overcharge that they 
paid to Apple.  The overcharge has not been passed on by 
anyone to anyone. Unlike in Illinois Brick, there will be 
no need to “trace the effect of the overcharge through each
step in the distribution chain.” 431 U. S., at 741. 
It is true that Apple’s a lleged anticompetitive conduct 
may leave Apple subject to multiple suits by different
plaintiffs. But Illinois Brick did not purport to bar 
multiple liability that is unrelated to passing an 
overcharge down a chain of distribution. Basic antitrust 
law tells us that the “mere fact that an antitrust violation 
produces two different classes of victims hardly entails 
that their injuries are duplicative of one another.” 2A 
Areeda & Hovenkamp ¶339d, at 136. Multiple suits are
not atypical when the intermediary in a distribution chain
is a bottleneck monopolist or monopsonist (or both)
between the manufacturer on the one end and the 
consumer on the other end. A retailer who is both a 
monopolist and a monopsonist may be liable to different 
classes of plaintiffs—both to downstream consumers and 
to upstream suppliers—when the retailer’s unlawful 
conduct affects both the downstream and upstream
markets. 
Here, some downstream iPhone consumers have sued 
Apple on a monopoly theory.  And it could be that some 
upstream app developers will also sue Apple on a monop-
sony theory. In this instance, the two suits would rely on 
fundamentally different theories of harm and would not
assert dueling claims to a “common fund,” as that term
was used in Illinois Brick. The consumers seek damages
based on the difference between the price they paid and 
the competitive price. The app developers would seek lost
profits that they could have ea rned in a competitive retail 
market. Illinois Brick does not bar either category of suit. 
In short, the three Illinois Brick rationales do not per-

14 APPLE INC. v. PEPPER 
Opinion of the Court 
suade us to remake Illinois Brick and to bar direct-
purchaser suits against monopolistic retailers who employ
commissions rather than markups.  The plaintiffs seek to
hold retailers to account if the retailers engage in unlaw-
ful anticompetitive conduct that harms consumers who 
purchase from those retailers. That is why we have anti-
trust law. 
* * * 
Ever since Congress overwh elmingly passed and Presi -
dent Benjamin Harrison signed the Sherman Act in 1890, 
“protecting consumers from monopoly prices” has been 
“the central concern of ant itrust.” 2A Areeda & 
Hovenkamp ¶345, at 179.  The consumers here purchased 
apps directly from Apple, and they allege that Apple used 
its monopoly power over the re tail apps market to charge 
higher-than-competitive prices. Our decision in Illinois 
Brick does not bar the consumers from suing Apple for 
Apple’s allegedly monopolistic conduct. We affirm the 
judgment of the U. S. Court of Appeals for the Ninth
Circuit. 
It is so ordered.

_________________ 
_________________ 
1 Cite as: 587 U. S. ____ (2019) 
GORSUCH, J., dissenting 
SUPREME COURT OF THE UNITED STATES 
No. 17–204 
APPLE INC., PETITIONER v. ROBERT PEPPER, ET AL. 
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 
APPEALS FOR THE NINTH CIRCUIT 
[May 13, 2019]
 JUSTICE GORSUCH, with whom T HE CHIEF JUSTICE, 
JUSTICE THOMAS, and JUSTICE ALITO join, dissenting. 
More than 40 years ago, in Illinois Brick Co.  v. Illinois, 
431 U. S. 720 (1977), this Court held that an antitrust 
plaintiff can’t sue a defendant for overcharging someone 
else who might (or might not) have passed on all (or some)
of the overcharge to him. Illinois Brick held that these 
convoluted “pass on” theories of damages violate tradi-
tional principles of proximate causation and that the right
plaintiff to bring suit is the one on whom the overcharge
immediately and surely fell.  Yet today the Court lets a 
pass-on case proceed. It does so by recasting Illinois Brick 
as a rule forbidding only suits where the plaintiff does not 
contract directly with the defend ant.  This replaces a rule
of proximate cause and economic reality with an easily 
manipulated and formalistic rule of contractual privity.
That’s not how antitrust law is supposed to work, and it’s 
an uncharitable way of treating a precedent which—
whatever its flaws—is far more  sensible than the rule the 
Court installs in its place. 
I 
 To understand Illinois Brick , it helps to start with the
case that paved the way for that decision: Hanover Shoe, 
Inc. v. United Shoe Machinery Corp. , 392 U. S. 481 (1968).
Hanover sued United, a company that supplied machinery

2 APPLE INC. v. PEPPER 
GORSUCH, J., dissenting 
Hanover used to make shoes. Hanover alleged that
United’s illegal monopoly in the shoe-making-machinery 
market had allowed it to charge supracompetitive prices.  As 
damages, Hanover sought to recover the amount it had 
overpaid United for machinery. United replied that Han-
over hadn’t been damaged at all because, United asserted,
Hanover had not absorbed the supposedly “illegal over-
charge” but had “passed the cost on to its customers” by 
raising the prices it charged for shoes. Id., at 487–488, 
and n. 6. This Court called United’s argument a “ ‘passing-
on’ defense” because it suggested that a court should 
consider whether an antitrust plaintiff had “passed on”
the defendant’s overcharge to its own customers when
assessing if and to what degree the plaintiff was injured 
by the defendant’s anticompetitive conduct.  Id., at 488. 
This Court rejected that defense. While §4 of the Clay-
ton Act allows private suits for those injured by antitrust
violations, we have long interpreted this language against 
the backdrop of the common law.  See, e.g., Associated 
Gen. Contractors of Cal., Inc. v. Carpenters, 459 U. S. 519, 
529–531 (1983).  And under ancient rules of proximate
causation, the “ ‘general tendency of the law, in regard to
damages at least, is not to go beyond the first step.’ ” 
Hanover Shoe , 392 U. S., at 490, n. 8 (quoting Southern 
Pacific Co. v. Darnell-Taenzer Lumber Co. , 245 U. S. 531, 
533 (1918)).  In Hanover Shoe , the first step was United’s 
overcharging of Hanover. To proceed beyond that and 
inquire whether Hanover had pa ssed on the overcharge to 
its customers, the Court held, would risk the sort of prob-
lems traditional principles of proximate cause were de -
signed to avoid.  “[N]early insuperable” questions would
follow about whether Hanover had the capacity and incen-
tive to pass on to its customers in the shoe-making market
United’s alleged monopoly rent from the separate shoe-
making-machinery market.  392 U. S., at 493.  Resolving 
those questions would, in turn, necessitate a trial within a

3 Cite as: 587 U. S. ____ (2019) 
GORSUCH, J., dissenting 
trial about Hanover’s power and conduct in its own mar-
ket, with the attendant risk that proceedings would be-
come “long and complicated” and would “involv[e] massive 
evidence and complicated theories.”  Ibid. 
Illinois Brick was just the other side of the coin.  With 
Hanover Shoe  having held that an antitrust defendant 
could not rely on a pass-on theory to avoid damages, Illi-
nois Brick addressed whether an antitrust plaintiff could 
rely on a pass-on theory to recover damages.  The State of 
Illinois had sued several manufacturers of concrete blocks, 
alleging that the defendants’ price-fixing conspiracy had 
enabled them to overcharge building contractors, who in
turn had passed on those charges to their customers,
including the State. Recognizing that Hanover Shoe had 
already prohibited antitrust violators from using a “pass-
on theory” defensively, the Court declined to “permit 
offensive use of a pass-on theory against an alleged viola -
tor that could not use the same theory as a defense.”  431 
U. S., at 735.  “Permitting the use of pass-on theories 
under §4,” the Court reasoned, would require determining
how much of the manufacturer’s monopoly rent was ab-
sorbed by intermediary building contractors and how 
much they were able and chose to pass on to their custom-
ers like the State.  Id., at 737. Allowing pass-on theories
would, as well, allow “plaintiffs at each level in the distri-
bution chain” to “assert conflicting claims to a common 
fund,” which would require “m assive efforts to apportion 
the recovery among all potential plaintiffs that could have 
absorbed part of the overcharge—from direct purchasers 
to middlemen to ultimate consumers.” Ibid. Better again, 
the Court decided, to adhere to traditional rules of proxi-
mate causation and allow only the first affected custom-
ers—the building contractors—to sue for the monopoly
rents they had directly paid. 
There is nothing surprising in any of this. Unless Con-
gress provides otherwise, this Court generally reads statu -

4 APPLE INC. v. PEPPER 
GORSUCH, J., dissenting 
tory causes of action as “limited to plaintiffs whose inju-
ries are proximately caused by violations of the statute.” 
Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 
U. S. 118, 132 (2014). That proximate cause requirement 
typically bars suits for injuries that are “derivative of 
misfortunes visited upon a third person by the defendant’s
acts.” Id., at 133 (internal quotation marks omitted). So, 
for example, if a defendant’s false advertising causes harm 
to one of its competitors, th e competitor can sue the false 
advertiser under the Lanham Act.  But if the competitor is 
unable to pay its rent as a result, the competitor’s landlord 
can’t sue the false advertiser, because the landlord’s harm 
derives from the harm to the competitor. Id., at 134; see 
also, e.g., Bank of America Corp.  v. Miami, 581 U. S. ___, 
___–___ (2017) (slip op., at 10–11); Dura Pharmaceuticals, 
Inc. v. Broudo , 544 U. S. 336, 346 (2005); Holmes v. Secu-
rities Investor Protection Corporation , 503 U. S. 258, 268– 
270 (1992).  This Court has long understood Illinois Brick 
as simply applying these traditional proximate cause
principles in the antitrust context.  See Associated Gen. 
Contractors, 459 U. S., at 532–535, 544–545.
1 
II 
The lawsuit before us depends on just the sort of pass-on
theory that Illinois Brick  forbids.  The plaintiffs bought
apps from third-party app developers (or manufacturers) 
in Apple’s retail Internet App Store, at prices set by the 
developers.  The lawsuit alleges that Apple is a monopolist 
—————— 
1 For this reason, it’s hard to make sense of the suggestion that Illi-
nois Brick may not apply to claims for injunctive relief, ante , at 5, n. 1. 
Under our normal rule of construction, a plaintiff who’s not proximately 
harmed by a defendant’s unlawful conduct has no cause of action to sue 
the defendant for any type of relief.  Lexmark Int’l, Inc. v. Static Control 
Components, Inc. , 572 U. S. 118, 135 (2014) (although a plaintiff that
“cannot quantify its losses with sufficient certainty to recover damages 
. . . may still be entitled to injuncti ve relief,” the requirement of proxi-
mate causation “must be met in every case”).

5 Cite as: 587 U. S. ____ (2019) 
GORSUCH, J., dissenting 
retailer and that the 30% commission it charges develop-
ers for the right to sell through its platform represents an
anticompetitive price. The problem is that the 30% com-
mission falls initially on the developers.  So if the commis-
sion is in fact a monopolistic overcharge, the developers
are the parties who are directly injured by it. Plaintiffs 
can be injured only if the developers are able and choose to
pass on the overcharge to them in the form of higher app 
prices that the developers alone control.  Plaintiffs admit-
ted as much in the district court, where they described
their theory of injury this way: “[I]f Apple tells the devel-
oper . . . we’re going to take this 30 percent commission . . . 
what’s the developer going to do?  The developer is going
to increase its price to cover Apple’s . . . demanded profit.” 
App. 143.
Because this is exactly the kind of “pass-on theory” 
Illinois Brick rejected, it should come as no surprise that
the concerns animating that decision are also implicated.
Like other pass-on theories, plaintiffs’ theory will necessi-
tate a complex inquiry into how Apple’s conduct affected 
third-party pricing decisions.  And it will raise difficult 
questions about apportionment of damages between app 
developers and their customers, along with the risk of
duplicative damages awards. If anything, plaintiffs’
claims present these difficulties even more starkly than
did the claims at issue in Illinois Brick. 
Consider first the question of causation. To determine if 
Apple’s conduct damaged plaintiffs at all (and if so, the 
magnitude of their damages), a court will first have to
explore whether and to what extent each individual app 
developer was able—and then opted—to pass on the 30% 
commission to its consumers in the form of higher app
prices. Sorting this out, if it can be done at all, will entail
wrestling with “ ‘complicated theories’ ” about “how the 
relevant market variables would have behaved had there 
been no overcharge.” Illinois Brick, 431 U. S., at 741–743.

6 APPLE INC. v. PEPPER 
GORSUCH, J., dissenting 
Will the court hear testimony to determine the market
power of each app developer, how each set its prices, and 
what it might have charged co nsumers for apps if Apple’s
commission had been lower?  Will the court also consider 
expert testimony analyzing how market factors might 
have influenced developers’ capacity and willingness to
pass on Apple’s alleged monopoly overcharge?  And will 
the court then somehow extrapolate its findings to all of 
the tens of thousands of developers who sold apps through
the App Store at different prices and times over the course
of years?
This causation inquiry will be complicated further by
Apple’s requirement that all app prices end in $0.99. As 
plaintiffs acknowledge, this rule has caused prices for the
“vast majority” of apps to “cluster” at exactly $0.99.  Brief 
for Respondents 44. And a developer charging $0.99 for 
its app can’t raise its price by just enough to recover the 
30-cent commission. Instead, if the developer wants to 
pass on the commission to consumers, it has to more than 
double its price to $1.99 (doubling the commission in the 
process), which could significantly affect its sales. In 
short, because Apple’s 99-cent rule creates a strong disin-
centive for developers to rais e their prices, it makes plain-
tiffs’ pass-on theory of injury even harder to prove.  Yet 
the court will have to consider all of this when determin-
ing what damages, if any, plaintiffs suffered as a result of 
Apple’s allegedly excessive 30% commission.
2 
Plaintiffs’ claims will also necessitate “massive efforts to 
apportion the recovery among a ll potential plaintiffs that 
—————— 
2 Plaintiffs haven’t argued (and so have forfeited in this Court any 
argument) that Apple’s imposition of the 99-cent rule was itself an 
antitrust violation that injured cons umers by raising the price of apps 
above competitive levels.  They didn’t  mention the 99-cent rule in their 
complaint in district court or in their briefs to the court of appeals.
And, as I’ve noted, they concede th at they are seeking damages “based
solely on” the 30% commission.  Brief in Opposition 5.

7 Cite as: 587 U. S. ____ (2019) 
GORSUCH, J., dissenting 
could have absorbed part of the overcharge,” including 
both consumers and app developers. Illinois Brick, 431 
U. S., at 737.  If, as plaintiffs contend, Apple’s 30% com -
mission is a monopolistic overcharge, then the app devel-
opers have a claim against Apple to recover whatever
portion of the commission they did not pass on to consum-
e r s .   B e f o r e  t o d a y , Hanover Shoe  would have prevented
Apple from reducing its liab ility to the developers by
arguing that they had passed on the overcharge to con-
sumers. But the Court’s holding that Illinois Brick doesn’t 
govern this situation surely must mean Hanover Shoe 
doesn’t either. So courts will have to divvy up the com-
missions Apple collected between the developers and the 
consumers. To do that, they’ll have to figure out which
party bore what portion of the overcharge in every pur -
chase. And if the developers bring suit separately from
the consumers, Apple might be at risk of duplicative dam-
ages awards totaling more than the full amount it col- 
lected in commissions.  To avoid that possibility, it may 
turn out that the developers are necessary parties who will
have to be joined in the plaintiffs’ lawsuit.  See Fed. Rule 
Civ. Proc. 19(a)(1)(B); Illinois Brick , 431 U. S., at 739 
(explaining that “[t]hese absent potential claimants would
seem to fit the classic definiti on of ‘necessary parties,’ for 
purposes of compulsory joinder”).
3 
—————— 
3 The Court denies that allowing bo th consumers and developers to 
sue over the same allegedly unlawful commission will “result in ‘con-
flicting claims to a common fund’ ” as Illinois Brick feared.  Ante, at 12. 
But Apple charged only one commissio n on each sale.  So even assum-
ing for argument’s sake that the 30% commission was entirely illegal,
Apple can only be required to pay out in damages, at most, the full 
amount it received in commissions. To  their credit, even plaintiffs have 
conceded as much, acknowledging that because “there is only one 30% 
markup,” any claim by the developers against Apple would necessarily
be seeking “a piece of the same 30% pi e.”  Brief in Opposition 12. It’s a 
mystery why the Court refuses to accept that sensible concession.

8 APPLE INC. v. PEPPER 
GORSUCH, J., dissenting 
III 
The United States and its antitrust regulators agree
with all of this, so how does the Court reach such a differ -
ent conclusion? Seizing on Illinois Brick ’s use of the 
shorthand phrase “direct pu rchasers” to describe the
parties immediately injured by the monopoly overcharge
in that case, the Court (re)characterizes Illinois Brick as a 
rule that anyone who purchases goods directly from an
alleged antitrust violator can sue, while anyone who 
doesn’t, can’t.  Under this revisionist version of Illinois 
Brick, the dispositive question becomes whether an “in-
termediary in the distribution chain” stands between the 
plaintiff and the defendant.  Ante, at 6. And because the 
plaintiff app purchasers in this case happen to have pur-
chased apps directly from Apple, the Court reasons, they 
may sue.
This exalts form over substance. Instead of focusing on 
the traditional proximate cause question where the al -
leged overcharge is first (and thus surely) felt, the Court’s
test turns on who happens to be  in privity of contract with
whom. But we’ve long recognized that antitrust law 
should look at “the economic reality of the relevant trans-
actions” rather than “formal conceptions of contract law.” 
United States  v. Concentrated Phosphate Export Assn., 
Inc., 393 U. S. 199, 208 (1968).  And this case illustrates 
why.  To evade the Court’s test, all Apple must do is 
amend its contracts. Instead of collecting payments for
apps sold in the App Store and remitting the balance (less
its commission) to developers, Apple can simply specify
that consumers’ payments will flow the other way: directly 
to the developers, who will then remit commissions to 
Apple. No antitrust reason exists to treat these contrac-
tual arrangements differently, and doing so will only 
induce firms to abandon their preferred—and presumably 
more efficient—distribution a rrangements in favor of less
efficient ones, all so they might avoid an arbitrary legal

9 Cite as: 587 U. S. ____ (2019) 
GORSUCH, J., dissenting 
rule. See Copperweld Corp.  v. Independence Tube Corp. , 
467 U. S. 752, 763, 772–774 (1984) (rejecting an “ ‘artificial 
distinction’” that “serves no valid antitrust goals but 
merely deprives consumers and  producers of the benefits” 
of a particular business model). 
 Nor does Illinois Brick  come close to endorsing such a
blind formalism. Yes, as the Court notes, the plaintiff in 
Illinois Brick  did contract directly with an intermediary 
rather than with the putative antitrust violator.  But 
Illinois Brick’s rejection of pass-on claims, and its explana-
tion of the difficulties those claims present, had nothing to 
do with privity of contract.  Instead and as we have seen, 
its rule and reasoning grew from the “general tendency of 
the law . . . not to go beyond” the party that first felt the
sting of the alleged overcharge, and from the complica-
tions that can arise when courts attempt to discern
whether and to what degree damages were passed on to 
others. Supra, at 2–3. The Court today risks replacing a
cogent rule about proximate cause with a pointless and 
easily evaded imposter. We do not usually read our own 
precedents so uncharitably.
Maybe the Court proceeds as it does today because it 
just disagrees with Illinois Brick. After all, the Court not 
only displaces a sensible rule in favor of a senseless one; it
also proceeds to question each of Illinois Brick ’s ration-
ales—doubting that those directly injured are always the 
best plaintiffs to bring suit, that calculating damages for 
pass-on plaintiffs will often be unduly complicated, and
that conflicting claims to a common fund justify limiting
who may sue. Ante, at 11–13. The Court even tells us 
that any “ambiguity” about the permissibility of pass-on 
damages should be resolved “in the direction of the statu -
tory text,” ante, at 8—ignoring that Illinois Brick  followed 
the well-trodden path of construing the statutory text in 
light of background common law principles of proximate 
cause. Last but not least, the Court suggests that the

10 APPLE INC. v. PEPPER 
GORSUCH, J., dissenting 
traditional understanding of Illinois Brick  leads to “arbi-
trary and unprincipled” results. Ante, at 8. It asks us to 
consider two hypothetical scenarios that, it says, prove the 
point. The first is a “markup” scenario in which a monopo-
listic retailer buys a product from a manufacturer for $6 
and then decides to sell the product to a consumer for $10,
applying a supracompetitive $4 markup.  The second is a 
“commission” scenario in which a manufacturer directs a 
monopolistic retailer to sell the manufacturer’s product to 
a consumer for $10 and the retailer keeps a supracompeti-
tive 40% commission, sending $6 back to the manufac-
turer. The two scenarios are economically the same, the
Court asserts, and forbidding recovery in the second for 
lack of proximate cause makes no sense.
But there is nothing arbitrary or unprincipled about 
Illinois Brick’s rule or results. The notion that the causal 
chain must stop somewhere is an ancient and venerable 
one. As with most any rule of proximate cause, reasonable 
people can debate whether Illinois Brick drew exactly the
right line in cutting off claims where it did. But the line it 
drew is intelligible, principled, administrable, and far 
more reasonable than the Court’s artificial rule of contrac-
tual privity.  Nor do the Court’s hypotheticals come close 
to proving otherwise. In the first scenario, the markup
falls initially on the consumer, so there’s no doubt that the 
retailer’s anticompetitive conduct proximately caused the 
consumer’s injury. Meanwhile, in the second scenario the 
commission falls initially on the manufacturer, and the
consumer won’t feel the pain unless the manufacturer can 
and does recoup some or all of the elevated commission by
raising its own prices. In that situation, the manufacturer 
is the directly injured party, and the difficulty of disaggre-
gating damages between th ose directly and indirectly
harmed means that the consumer can’t establish proxi-
mate cause under traditional principles. 
Some amici share the Court’s skepticism of Illinois

11 Cite as: 587 U. S. ____ (2019) 
GORSUCH, J., dissenting 
Brick. They even urge us to overrule Illinois Brick, assur-
ing us that “modern economic techniques” can now miti -
gate any problems that arise in allocating damages be-
tween those who suffer them directly and those who suffer
them indirectly. Brief for State of Texas et al. as Amici 
Curiae 25. Maybe there is something to these arguments; 
maybe not. But there’s plenty of reason to decline any
invitation to take even a small step away from Illinois 
Brick today.  The plaintiffs have not asked us to overrule
our precedent—in fact, they’ve disavowed any such re-
quest. Tr. of Oral Arg. 40.  So we lack the benefit of the 
adversarial process in a complex area involving a 40-year-
old precedent and many hard qu estions.  For example, if 
we are really inclined to overrule Illinois Brick , doesn’t 
that mean we must do the same to Hanover Shoe ? If the 
proximate cause line is no long er to be drawn at the first 
injured party, how far down the causal chain can a plain-
tiff be and still recoup damages?  Must all potential claim-
ants to the single monopoly rent be gathered in a single
lawsuit as necessary parties (and if not, why not)?  With-
out any invitation or reason to revisit our precedent, and
with so many grounds for caution, I would have thought 
the proper course today would have been to afford Illinois 
Brick full effect, not to begin whittling it away to a bare 
formalism. I respectfully dissent.

Retrieval chunks

• #1

  1 (Slip Opinion) OCTOBER TERM, 2018 Syllabus NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the…

• #2

  Illinois Brick, the iPhone owners here are not consumers at the bot- 2 APPLE INC. v. PEPPER Syllabus tom of a vertical distribution chain who are attempting to sue manu- facturers at the top of the chain. The absence of an intermediary in the distribution chain between Apple and the consumer is dispositive. Pp.…

• #3

  might be complicated. Third, Apple claims that allowing consumers to sue will result in “conflicting claims to a common fund—the amount of the alleged overcharge.” Illinois Brick, 431 U. S., at 737. But this is not a case where multiple parties at different levels of a distribution chain are trying to recover the…

• #4

  supposedly were not “direct purchasers” from Apple under our decision in Illinois Brick Co . v. Illinois , 431 U. S. 720, 2 APPLE INC. v. PEPPER Opinion of the Court 745–746 (1977). We disagree. The plaintiffs purchased apps directly from Apple and therefore are direct purchas- ers under Illinois Brick . At this…

• #5

  would be able to “choose between Apple’s high-priced App Store and less costly alternatives.” Id., at 55a. And they allege that they have “paid more for their iPhone apps than they would have paid in a competitive market.” Id., at 53a. Apple moved to dismiss the complaint, arguing that the iPhone owners were…

• #6

  ask, whether the consumers were “direct purchasers” from Apple. Illinois Brick, 431 U. S., at 745–746. It is undis - puted that the iPhone owners bought the apps directly from Apple. Therefore, under Illinois Brick , the iPhone owners were direct purchasers who may sue Apple for alleged monopolization. That st…

• #7

  The consumer State of Illinois sued the manufacturer Illinois Brick. The State alleged that Illinois Brick had engaged in a conspiracy to fix the price of concrete blocks. According to the complaint, the State paid more for the concrete blocks than it would have paid absent the price- fixing conspiracy. The mono…

• #8

  supporting the plaintiffs, and they argue that C should be able to sue A in that hypothetical. Th ey ask us to overrule Illinois Brick to allow such suits. In light of our ruling in favor of the plaintiffs in this case, we have no occasion to consider that argument for overruling Illinois Brick. 7 Cite as: 587 …

• #9

  about whether a direct purchaser may sue an antitrust violator, we should resolve that ambiguity in the direction of the statutory text. And under the text, direct purchas - ers from monopolistic retailers are proper plaintiffs to sue those retailers. Second, in addition to deviating from statutory text and prec…

• #10

  supplier and the retailer should determine whether a monopolistic retailer can be sued by a downstream con- sumer who has purchased a good or service directly from the retailer and has paid a higher-than-competitive price because of the retailer’s unlawful monopolistic conduct. As the Court of Appeals aptly state…

• #11

  is entitled to sue the retailer under the antitrust laws. Third, if accepted, Apple’s theory would provide a roadmap for monopolistic reta ilers to structure transac - tions with manufacturers or suppliers so as to evade anti- trust claims by consumers and thereby thwart effective antitrust enforcement. Consider…

• #12

  the rationales of Illinois Brick “apply with equal force” in every individual case. 497 U. S., at 216. We should not engage in “an unwarranted and counterproductive exer - cise to litigate a series of exceptions.” Id., at 217. But even if we engage with this argument, we conclude that the three Illinois Brick rat…

• #13

  overcharge initially levied by the manufacturer at the top of the chain. Cf. id., at 726–727; Hanover Shoe, Inc. v. United Shoe Machinery Corp. , 392 U. S. 481, 483–484 13 Cite as: 587 U. S. ____ (2019) Opinion of the Court (1968). If the iPhone owners prevail, they will be entitled to the full amount of the un…

• #14

  ful anticompetitive conduct that harms consumers who purchase from those retailers. That is why we have anti- trust law. * * * Ever since Congress overwh elmingly passed and Presi - dent Benjamin Harrison signed the Sherman Act in 1890, “protecting consumers from monopoly prices” has been “the central concern o…

• #15

  Hanover used to make shoes. Hanover alleged that United’s illegal monopoly in the shoe-making-machinery market had allowed it to charge supracompetitive prices. As damages, Hanover sought to recover the amount it had overpaid United for machinery. United replied that Han- over hadn’t been damaged at all because,…

• #16

  could not rely on a pass-on theory to avoid damages, Illi- nois Brick addressed whether an antitrust plaintiff could rely on a pass-on theory to recover damages. The State of Illinois had sued several manufacturers of concrete blocks, alleging that the defendants’ price-fixing conspiracy had enabled them to over…

• #17

  derives from the harm to the competitor. Id., at 134; see also, e.g., Bank of America Corp. v. Miami, 581 U. S. ___, ___–___ (2017) (slip op., at 10–11); Dura Pharmaceuticals, Inc. v. Broudo , 544 U. S. 336, 346 (2005); Holmes v. Secu- rities Investor Protection Corporation , 503 U. S. 258, 268– 270 (1992). Thi…

• #18

  Illinois Brick rejected, it should come as no surprise that the concerns animating that decision are also implicated. Like other pass-on theories, plaintiffs’ theory will necessi- tate a complex inquiry into how Apple’s conduct affected third-party pricing decisions. And it will raise difficult questions about a…

• #19

  tiffs’ pass-on theory of injury even harder to prove. Yet the court will have to consider all of this when determin- ing what damages, if any, plaintiffs suffered as a result of Apple’s allegedly excessive 30% commission. 2 Plaintiffs’ claims will also necessitate “massive efforts to apportion the recovery amon…

• #20

  sue over the same allegedly unlawful commission will “result in ‘con- flicting claims to a common fund’ ” as Illinois Brick feared. Ante, at 12. But Apple charged only one commissio n on each sale. So even assum- ing for argument’s sake that the 30% commission was entirely illegal, Apple can only be required to …

• #21

  Apple. No antitrust reason exists to treat these contrac- tual arrangements differently, and doing so will only induce firms to abandon their preferred—and presumably more efficient—distribution a rrangements in favor of less efficient ones, all so they might avoid an arbitrary legal 9 Cite as: 587 U. S. ____ (20…

• #22

  traditional understanding of Illinois Brick leads to “arbi- trary and unprincipled” results. Ante, at 8. It asks us to consider two hypothetical scenarios that, it says, prove the point. The first is a “markup” scenario in which a monopo- listic retailer buys a product from a manufacturer for $6 and then decides…

• #23

  maybe not. But there’s plenty of reason to decline any invitation to take even a small step away from Illinois Brick today. The plaintiffs have not asked us to overrule our precedent—in fact, they’ve disavowed any such re- quest. Tr. of Oral Arg. 40. So we lack the benefit of the adversarial process in a comple…