In a major legal setback for Apple, the U.S. Supreme Court on Monday gave the green light for a sweeping antitrust lawsuit against the tech giant's pricing practices to move ahead.
Apple shares fell about 5% after the high court, in a 5-4 ruling, upheld a lower court's decision allowing the class action suit brought by consumers.
The lawsuit claims Apple is monopolizing the iPhone software applications market, because it requires apps for the iPhone to be sold through its own App Store and charges app developers a 30 percent commission for every sale.
Apple had argued that it is only acting as an agent for app developers, and that they, not Apple, are passing those charges on to consumers.
But the plaintiffs said since they pay Apple - not an app developer - when buying an app, they were direct victims of the extra charges.
Conservative Justice Brett Kavanaugh, in a surprise move, sided with the court's liberals in the 5-4 decision.
In his majority ruling, read from the bench, Kavanaugh said the court's 30-year-old decision limiting damages in a similar case was "not a get-out-of-court-free card for monopolistic retailers." The class action suit, still in its early stages, could yield billions of dollars in damages against Apple if successful.
In a statement, Apple said the decision could pose a threat to the billion dollar e-commerce industry.