(Slip Opinion) OCTOBER TERM, 2018 1 

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 lawfully buy apps. Most of those apps are created by independent developers under contracts with Apple. Apple charges the developers a 

$99 annual membership fee, allows them to set the retail price of the

apps, and charges a 30% commission on every app sale. Respondents, four iPhone owners, sued Apple, alleging that the company has

unlawfully monopolized the aftermarket for iPhone apps. Apple

moved to dismiss, arguing that the iPhone owners could not sue because 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 direct 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 antitrust 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 forbidden 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-than-competitive prices 

from an allegedly monopolistic retailer. Applying §4, this Court has 

consistently stated that “the immediate buyers from the alleged antitrust 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 may 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 manufacturers 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 complaining party. But that theory 

suffers from three main problems. First, it contradicts statutory text 

and precedent by requiring the Court to rewrite the rationale of Illinois Brick and to gut its longstanding bright-line rule. Any ambiguity 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 persuasive economically or legally. It would draw an arbitrary and unprincipled line among retailers based on their financial arrangements 

with their manufacturers or suppliers. And it would permit a consumer to sue a monopolistic retailer when the retailer set the retail 

price by marking up the price it had paid the manufacturer or supplier for the good or service but not 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 retailers to structure transactions with manufacturers or suppliers so 

as to evade antitrust claims by consumers and thereby thwart effective 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’ favor. First, Apple posits that allowing only the upstream app developers—and not the downstream consumers—to sue Apple would mean 

more effective antitrust enforcement. But that makes little sense, 

and it would directly contradict the longstanding goal of effective 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. 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 the manufacturer at the top of the

chain, cf. id., at 726–727. Pp. 11–14.

 846 F. 3d 313, affirmed. 
 

 

 

Cite as: 587 U. S. ____ (2019) 3 

Syllabus

 KAVANAUGH, J., delivered the opinion of the Court, in which GINSBURG, BREYER, SOTOMAYOR, and KAGAN, JJ., joined. GORSUCH, J., filed a 

dissenting opinion, in which ROBERTS, C. J., and THOMAS and ALITO, JJ., 

joined. 
 

 

_________________ 

_________________ 

Cite as: 587 U. S. ____ (2019) 1 

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 apps. The consumers argue,

in particular, that Apple has monopolized the retail market for the sale of apps and has unlawfully used its monopolistic power to charge consumers higher-thancompetitive 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 consumerplaintiffs 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 purchasers 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 then 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 developers must pay Apple a $99 annual membership fee. 

Apple requires that the retail sales price end in $0.99, but 

otherwise allows the app developers 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% 
 

Cite as: 587 U. S. ____ (2019) 3 

Opinion of the Court 

fee, even if ” the iPhone owners wish “to buy apps elsewhere or pay less.” Id., at 45a. According to the complaint, that 30 percent commission is “pure profit” for 

Apple and, in a competitive environment with other retailers, “Apple would be under considerable pressure to substantially 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 complaint. According to the District 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, Illinois 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 purchased 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 higherthan-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 straightforward 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-competitive price or (2) do not 

buy the app at all. Any iPhone owners who are dissatisfied 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 undisputed 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 conspire with any other person

or persons, to monopolize any part of the trade or commerce 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 
 

 

 

 

Cite as: 587 U. S. ____ (2019) 5 

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 antitrust 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 contractors in turn sold masonry

structures to general contractors. Those general contractors 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 pricefixing conspiracy. The monopoly overcharge allegedly 

flowed all the way down the distribution chain to the 

—————— 

1 Illinois Brick held that the direct-purchaser 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 antitrust 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. Sumitomo 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 directly to Apple. The absence 

of an intermediary is dispositive. Under Illinois Brick, the 

—————— 

2Thirty States and the District of Columbia filed an amicus brief 

supporting the plaintiffs, and they argue that C should be able to sue A 

in that hypothetical. They 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. 
 

Cite as: 587 U. S. ____ (2019) 7 

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 retailer 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 accords 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 consumers 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 purchaser 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 purchasers 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 economically 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 hypothetical 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 nothing to the manufacturer; agree with the manufacturer that 

the retailer will sell the product for $10 and keep 40 percent 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 
 

 

Cite as: 587 U. S. ____ (2019) 9 

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 manufacturer or supplier for the good or service. But a consumer 

could not sue a monopolistic retailer when the manufacturer 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 similar 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 consumer 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 approach that ignores the reality

that a distribution system that 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-thancompetitive 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 percent 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 commission was 10 percent or 30 percent, then the consumers’ 

damages would presumably be zero. But we cannot assume 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-thancompetitive 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 downstream 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 retailers to structure transactions with manufacturers or suppliers so as to evade antitrust 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 product for the supplier without purchasing it from the supplier. 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 antitrust suits by consumers, even 
 

Cite as: 587 U. S. ____ (2019) 11 

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 retailers 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 directpurchaser 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 complicated damages calculations; and (3) eliminating duplicative 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 exercise 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 considered individually or together—cut strongly in the plaintiffs’ 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 consumers—to sue Apple would mean more effective enforcement 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 would directly contradict the 

longstanding goal of effective 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 monopolistic retailers to play any time that a damages calculation 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-competitive prices. Moreover, the 

damages calculation may be just as complicated in a retailer markup case as it is in a retailer commission case.

Yet Apple apparently accepts consumers suing monopolistic retailers in a retailer markup 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 
 

 

Cite as: 587 U. S. ____ (2019) 13 

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 alleged 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 monopsony 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 earned 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 directpurchaser suits against monopolistic retailers who employ

commissions rather than markups. The plaintiffs seek to

hold retailers to account if the retailers engage in unlawful anticompetitive conduct that harms consumers who 

purchase from those retailers. That is why we have antitrust law. 

* * * 

Ever since Congress overwhelmingly passed and President Benjamin Harrison signed the Sherman Act in 1890, 

“protecting consumers from monopoly prices” has been 

“the central concern of antitrust.” 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 retail 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. 
 

 

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Cite as: 587 U. S. ____ (2019) 1 

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 THE 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 traditional 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 defendant. 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 Hanover hadn’t been damaged at all because, United asserted,

Hanover had not absorbed the supposedly “illegal overcharge” 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 “‘passingon’ 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 Clayton 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 passed on the overcharge to 

its customers, the Court held, would risk the sort of problems traditional principles of proximate cause were designed to avoid. “[N]early insuperable” questions would

follow about whether Hanover had the capacity and incentive to pass on to its customers in the shoe-making market

United’s alleged monopoly rent from the separate shoemaking-machinery market. 392 U. S., at 493. Resolving 

those questions would, in turn, necessitate a trial within a 
 

Cite as: 587 U. S. ____ (2019) 3 

GORSUCH, J., dissenting 

trial about Hanover’s power and conduct in its own market, with the attendant risk that proceedings would become “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, Illinois 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 “passon theory” defensively, the Court declined to “permit 

offensive use of a pass-on theory against an alleged violator 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 absorbed by intermediary building contractors and how 

much they were able and chose to pass on to their customers like the State. Id., at 737. Allowing pass-on theories

would, as well, allow “plaintiffs at each level in the distribution chain” to “assert conflicting claims to a common 

fund,” which would require “massive 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 proximate causation and allow only the first affected customers—the building contractors—to sue for the monopoly

rents they had directly paid. 

There is nothing surprising in any of this. Unless Congress provides otherwise, this Court generally reads statu-
 

 

 

 

4 APPLE INC. v. PEPPER 

GORSUCH, J., dissenting 

tory causes of action as “limited to plaintiffs whose injuries 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, the 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. Securities 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 

—————— 

1For this reason, it’s hard to make sense of the suggestion that Illinois 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 injunctive relief,” the requirement of proximate causation “must be met in every case”). 
 

 

 

Cite as: 587 U. S. ____ (2019) 5 

GORSUCH, J., dissenting 

retailer and that the 30% commission it charges developers for the right to sell through its platform represents an

anticompetitive price. The problem is that the 30% commission falls initially on the developers. So if the commission 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 admitted as much in the district court, where they described

their theory of injury this way: “[I]f Apple tells the developer . . . 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 necessitate 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 consumers 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 disincentive for developers to raise their prices, it makes plaintiffs’ pass-on theory of injury even harder to prove. Yet 

the court will have to consider all of this when determining 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 all potential plaintiffs that 

—————— 

2Plaintiffs 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 consumers 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 that they are seeking damages “based

solely on” the 30% commission. Brief in Opposition 5. 
Cite as: 587 U. S. ____ (2019) 7 

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% commission is a monopolistic overcharge, then the app developers have a claim against Apple to recover whatever

portion of the commission they did not pass on to consumers. Before today, Hanover Shoe would have prevented

Apple from reducing its liability to the developers by

arguing that they had passed on the overcharge to consumers. 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 commissions 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 purchase. And if the developers bring suit separately from

the consumers, Apple might be at risk of duplicative damages awards totaling more than the full amount it collected 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 definition of ‘necessary parties,’ for 

purposes of compulsory joinder”).3 

—————— 

3The Court denies that allowing both consumers and developers to 

sue over the same allegedly unlawful commission will “result in ‘conflicting claims to a common fund’ ” as Illinois Brick feared. Ante, at 12. 

But Apple charged only one commission on each sale. So even assuming 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% pie.” 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 different conclusion? Seizing on Illinois Brick’s use of the 

shorthand phrase “direct purchasers” 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 “intermediary 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 purchased 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 alleged 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 transactions” 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 contractual arrangements differently, and doing so will only 

induce firms to abandon their preferred—and presumably 

more efficient—distribution arrangements in favor of less

efficient ones, all so they might avoid an arbitrary legal 
Cite as: 587 U. S. ____ (2019) 9 

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 explanation 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 complications 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 rationales—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 statutory 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 “arbitrary 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 monopolistic 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 supracompetitive 40% commission, sending $6 back to the manufacturer. 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 contractual 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 disaggregating damages between those directly and indirectly

harmed means that the consumer can’t establish proximate cause under traditional principles. 

Some amici share the Court’s skepticism of Illinois 
Cite as: 587 U. S. ____ (2019) 11 

GORSUCH, J., dissenting 

Brick. They even urge us to overrule Illinois Brick, assuring us that “modern economic techniques” can now mitigate any problems that arise in allocating damages between 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 request. Tr. of Oral Arg. 40. So we lack the benefit of the 

adversarial process in a complex area involving a 40-yearold precedent and many hard questions. 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 longer to be drawn at the first 

injured party, how far down the causal chain can a plaintiff be and still recoup damages? Must all potential claimants to the single monopoly rent be gathered in a single

lawsuit as necessary parties (and if not, why not)? Without 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.