AAI Unpacks New Supreme Court Opinion Handing Victory to Consumer Antitrust Plaintiffs (Apple v. Pepper)

The American Antitrust Institute (AAI) has issued a commentary examining the origins and implications of the Supreme Court’s ruling in Apple v. Pepper, Cracking Pepper: An Analysis of the Supreme Court’s Latest Pronouncement on the Indirect Purchaser Rule.

On May 13, 2019, in a 5-4 opinion written by Justice Kavanaugh, the U.S. Supreme Court held that the Illinois Brick indirect purchaser rule does not bar consumers from bringing monopolization claims against retail distribution monopolists that operate using an “agency” rather than a “wholesale” business model.  The majority opinion embraces several arguments set forth in an amicus brief submitted by AAI.

This commentary unpacks the Court’s holding and explores its implications for consumers and small suppliers who do business with dominant internet platforms.  Among other things, the commentary explains why the opinion may be a boon to plaintiffs in future disputes over the scope of the indirect purchaser rule.  It also considers the future vitality of both the Illinois Brick rule barring indirect purchaser suits and the Hanover Shoe rule barring defendants from asserting a “pass-on” defense.  Finally, it considers what the opinion reveals about emerging antitrust dynamics on the reconstituted Supreme Court.