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A judge overseeing a group of developers seeking $200 billion from the Apple App Store suit has ruled, handing a defeat to the developers fighting against what they called Apple’s “tyrannical greed.”
In a 34-page ruling, Judge Edward Chen dismissed a lawsuit alleging that Apple used monopoly power to exclude apps that it didn’t like from the App Store, to benefit its own “institutional partners.” Chen ruled that the developers failed to identify a market that Apple exerts monopolistic control.
Specifically, the developers tried to define the market as both the “smartphone market” as a whole, and the “iOS institutional app market.” Five other markets were cited as being “downstream” as well, according to a report by Courthouse News on Thursday, but the judge ruled that the classifications all “failed to pass muster” and were unclear.
“Plaintiffs fail to define that area of effective competition in which they compete,” Chen wrote in his ruling. “They are not smartphone manufacturers. Nor do they provide any other basis for the court to find that the market of U.S. Smartphones is the area of effective competition’ for plaintiffs’ claims.”
Furthermore, the judge declared that the markets that the developers cited were “single-brand markets” where Apple was “inherently and necessarily” the only participant.
The developers’ attorney has pledged to fight on, calling the ruling “baffling.” An appeal is expected.
Any appeal would likely take years. Success in the future appeals will likely require a great deal of antitrust law modification to make the Sherman anti-trust laws apply in this case, as well as a victory on appeal in the Epic versus Apple case — neither of which seem likely to happen in the short-term.
The long-running legal dispute between Apple and the developer of “Coronavirus Reporter,” came to a head in early July, 2021. The developer withdrew its antitrust case that it filed earlier, and refiled it as a class action one alongside other developers.
“Coronavirus Reporter” and a second company, Calid Inc, joined forces to represent “themselves and all others similarly situated.”
The filing attempted to draw comparisons with Apple, and the decades-old successful anti competition case against Microsoft and browser bundling.
“Apple, by breathtaking comparison, has secured its position as the wealthiest company in the world by committing all of those enumerated crimes under the guise of popularity and commitment to quality,” the combined filing said. “There can be little doubt that Tim Cook sought to compensate for the tragic loss of Steve Jobs – and his gift for innovation – by seeking reckless profits on the heels of the success that Apple enjoyed with the iPhone.”
These two developers wanted to redefine the Sherman Act to make the App Store liable for not making all iPhone users aware of some developers of free apps. In the filing, the developers said that free apps represent “a major component of the ecosystem and a significant source of lost ‘person-years’ of work.”
The “Coronavirus Reporter” developer restated its previous complaints that Apple blocked its COVID app unjustly. Apple said that the developer’s complaints about it were “cavalier.”
Apple blocked the app citing the developers’ insufficient medical background. “Coronavirus Reporter” notes that it counts a head NASA cardiologist among its team, and now believes that Apple chose to promote a different free app in its place.
“About one month after rejecting [our] app, Apple permitted several employees at a London teaching hospital to distribute a COVID app on the App Store that functioned nearly identically to Coronavirus Reporter,” continues the filing. “That competing app obtained the so-called first mover advantage, and is currently used by five million individuals daily.”
The suit called for at least $90 million in damages for every one of an estimated 500 apps that were allegedly “suppressed or rejected.” The total damages asked for “approaches $200 billion when ten years of $99 developer fees are factored in.”
The suit also wanted the creation of an “independent, and impartial App Court,” to prevent anti-competitive behavior.