The U.S. Supreme Court appeared skeptical of Apple on Monday during oral argument in a case that could permit iPhone owners to move forward with an antitrust suit against the company for allegedly inflating the prices in its App Store.
That lawsuit could disrupt the electronic giant's mobile software sales ecosystem, and potentially hit the company with hundreds of millions of dollars in penalties.
Shares of the company fell negative briefly in intraday trade after the hour-long argument concluded, before recovering much of their losses. The company has been dogged by concerns about slow iPhone sales.
The justices, including several of the court's conservatives, seemed sympathetic to the arguments presented by the iPhone owners who brought the case.
Two of the court's conservative justices, Samuel Alito and Neil Gorsuch, went as far as suggesting that the Supreme Court precedent on which Apple based its argument may need to be revisited.
To be sure, it is not always possible to guess how justices may rule based on their questions at oral argument. In most cases that have come before the Supreme Court under Chief Justice John Roberts in which one of the parties is a corporation, that corporation has prevailed.
The iPhone owners alleged Monday that the 30 percent commission Apple takes on app sales leads app developers to increase their prices, passing on the burden to consumers. Apple, which blocks iPhone owners from purchasing software from third-party marketplaces, is able to charge its commission because of its monopoly power, they argued.
The Supreme Court will not settle the underlying antitrust issue. Rather, the justices are reviewing whether iPhone owners are entitled to bring such a case at all.
In 1977, the Supreme Court established the "Illinois brick doctrine," under which only the direct purchaser of a good is entitled to collect antitrust damages. Apple argued that under the doctrine, only app developers would be able to bring an antitrust suit against the company. The company argued that it acts as an agent for developers, who set their own prices and are ultimately the direct sellers.