Developers of free apps seek $200 billion damages, claim Apple restrains trade

AppleInsider · July 21, 2021 12:58PM

Two developers, including the maker of "Coronavirus Reporter," say Apple unfairly promotes certain free apps in the App Store, and want $200 billion in damages for themselves and other similarly-affected companies.

App Store

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, intending to instead refile it as a class action one alongside other developers.

"Coronavirus Reporter" and a second company, Calid Inc, have now joined forces to represent "themselves and all others similarly situated." A new class actions suit has been filed with the US District Court for the Northern District of California. Full text is below.

"This class action seeks to redress the injustices Apple committed to the developer base that the monopoly necessarily relies upon to exist," says the filing. "Documented herein are the anti- competitive business practices that have become the norm at Apple, and how they have harmed Coronavirus Reporter, CALID (CALendar IDentifier scheduling platform), and countless other class members that shall be identified in expedited discovery."

The filing draws parallels with the Department of Justice's historical anticompetition case against Microsoft. It notes that Microsoft was accused despite, for instance, not rejecting apps, nor charging a fee to be a registered developer.

"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," continues the filing. "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."

The two developers describe a "stealth transition" from Apple's "past days of creative good," into how "the company now operates as a stealth monopolist."

The original case concerned, in part, Apple's planning to launch its own COVID-related technology with Google.

Key to "Coronavirus Reporter" and Calid's filing is this issue of monopoly. Despite multiple cases failing to get the App Store to come under the aegis of the Sherman Act, thee two developers are attempting exactly that.

"Apple controls nearly 80% of the commerce transactions that occur over this device group [smartphones]," says the filing. "In this model, Apple sells to the consumer a bundle of hardware and software."

"The consumer is unaware of the existence of developers, if they aren't approved and promoted by Apple," it continues. "The merchant of record for all iPhone app purchases is indeed Apple."

The filing proposes that other cases have neglected "to formulate Sherman definitions that equally apply to free apps." These two developers want to redefine the Sherman Act to make the App Store liable, because free apps represent "a major component of the ecosystem and a significant source of lost 'person-years' of work."

"Coronavirus Reporter" restates its previous complaints that Apple blocked its COVID app, complaints that Apple has described as "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 filing does not name the competing app, but does later refer to one produced by Guy's and St Thomas's NHS Foundation Trust in the UK. The case argues that even though this particular rival was "sponsored by an institution," it was "primarily the work-product of several individuals," as was "Coronavirus Reporter."

Calling the approval of one such app an example of Apple's "breathtaking arbitrary standards," the suit calls the specific blocking of "Coronavirus Reporter" as an "intentional, flagrant restraint of trade."

Consequently, the suit calls 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 wants the creation of an "independent, and impartial App Court," to prevent anti-competitive behavior.

Coronavirus Reporter and CALID Versus Apple by Mike Wuerthele on Scribd

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cpsro · July 21, 2021 1:21PM

Sounds like Apple did an excellent job of curation in this case.

red oak · July 21, 2021 1:34PM

Why does AppleInsider give coverage to crap like this? Where is the editorial judgement

jungmark · July 21, 2021 1:44PM

What a waste of the court’s time.

dysamoria · July 21, 2021 1:54PM

Uh, developers of “free apps”? Free as in loaded with ads or in-app purchases? Or were they *actually* free?

I do think Apple have changed from one company to another, and not for the better, but this specific argument of monopoly still doesn’t work. There’s something in there that’s anticompetitive practices, but monopoly isn’t really it.

bloggerblog · July 21, 2021 2:08PM

Comparing it with Microsoft is just desperate. Microsoft controlled 98% of the computer market, they taxed computer manufacturers, and used their monopoly to put an end to the browser market and bring other OSes to extinction such as Irix. Their monopolistic intent was well documented in courts with phrases like "bring Netscape to extinction" and "knife the baby" for QuickTime.
In contrast iOS has a 26% market share, Android has 74%. Who is closer to a monopoly?

jimh2 · July 21, 2021 2:10PM

If only the plaintiff was made responsible for all legal costs associated with cases, we would no longer have class action lawsuits which only benefit lawyers.

crowley · July 21, 2021 2:29PM

jimh2 said:

If only the plaintiff was made responsible for all legal costs associated with cases, we would no longer have class action lawsuits which only benefit lawyers.

The voice of Corporate America has spoken. As if it isn't already hard enough to sue, let's stack the deck even more and stamp the first amendment into the muck.

sbdude · July 21, 2021 3:12PM

crowley said:

jimh2 said:

If only the plaintiff was made responsible for all legal costs associated with cases, we would no longer have class action lawsuits which only benefit lawyers.

The voice of Corporate America has spoken. As if it isn't already hard enough to sue, let's stack the deck even more and stamp the first amendment into the muck.

You must not live in the United States if you think it's at all difficult to sue anyone or anything. Lawsuits, by the way, are not considered free speech, and limitations have been placed on any number of vexatious litigants who abuse the courts for their personal gain. And there are plenty of statutes wherein the prevailing party is allowed to collect attorneys fees from the losing party. You have every right to sue, but not for whatever reason you see fit.

crowley · July 21, 2021 3:15PM

sbdude said:

crowley said:

jimh2 said:

If only the plaintiff was made responsible for all legal costs associated with cases, we would no longer have class action lawsuits which only benefit lawyers.

The voice of Corporate America has spoken. As if it isn't already hard enough to sue, let's stack the deck even more and stamp the first amendment into the muck.

You must not live in the United States if you think it's at all difficult to sue anyone or anything. Lawsuits, by the way, are not considered free speech, and limitations have been placed on any number of vexatious litigants who abuse the courts for their personal gain. And there are plenty of statutes wherein the prevailing party is allowed to collect attorneys fees from the losing party. You have every right to sue, but not for whatever reason you see fit.

Of course, and those are all sensible limitations and balances. Ordering plaintiffs to pay defendants legal fees by default is not reasonable.

tedz98 · July 21, 2021 3:41PM

Just remember that there is just one pathway to get an app installed on an iPhone and that’s through Apple. Apple has complete and total control over the App Store marketplace. Certainly there are security benefits to this level of control. But one could easily argue that if an app passes security standards and doesn’t violate some severe level of indecency why shouldn’t all apps be allowed in the App Store and let the competition of the market pick winners and losers? I for one don’t need some Apple curation process to “protect” me from undesirable apps. I’m an adult. I can handle that. I’m not a lawyer but there is certainly some level of “monopolistic” behavior happening on the part of Apple when they have absolute control over which apps are allowed in the App Store.

tmay · July 21, 2021 4:04PM

crowley said:

jimh2 said:

If only the plaintiff was made responsible for all legal costs associated with cases, we would no longer have class action lawsuits which only benefit lawyers.

The voice of Corporate America has spoken. As if it isn't already hard enough to sue, let's stack the deck even more and stamp the first amendment into the muck.

This isn't a first amendment related issue.

pwrmac · July 21, 2021 4:04PM

Getting crazier by the day these lawsuits. What is next? Sue Apple because you cannot run iOS on a cheap Android phone.

bloggerblog · July 21, 2021 4:14PM

tedz98 said:

Just remember that there is just one pathway to get an app installed on an iPhone and that’s through Apple. Apple has complete and total control over the App Store marketplace. Certainly there are security benefits to this level of control. But one could easily argue that if an app passes security standards and doesn’t violate some severe level of indecency why shouldn’t all apps be allowed in the App Store and let the competition of the market pick winners and losers? I for one don’t need some Apple curation process to “protect” me from undesirable apps. I’m an adult. I can handle that. I’m not a lawyer but there is certainly some level of “monopolistic” behavior happening on the part of Apple when they have absolute control over which apps are allowed in the App Store.

There's always Android. Apple's market differential is their ecosystem, I would like to have that option in our malware infested market. If Apple opens up their system and some developers chose to provide their products only through proprietary means they'll ruin the entire intent of the ecosystem. You can't have a monopoly on your own products. Apple doesn't have a market monopoly, the only reason companies are coming down on Apple is because their ecosystem provides the confidence to their customer to pay for things and thus make a lot of profits. These companies are shooting themselves in the foot, their short sightedness makes them think 'oh, our own App Store?! We'll make billions!!' is rubbish. Android does not provide that level of customer confidence due to the lack of an Apple-like secure ecosystem and therefore they doesn't have the level of sales that the App Store does.

mrd10 · July 21, 2021 5:30PM

bloggerblog said:

tedz98 said:

Just remember that there is just one pathway to get an app installed on an iPhone and that’s through Apple. Apple has complete and total control over the App Store marketplace. Certainly there are security benefits to this level of control. But one could easily argue that if an app passes security standards and doesn’t violate some severe level of indecency why shouldn’t all apps be allowed in the App Store and let the competition of the market pick winners and losers? I for one don’t need some Apple curation process to “protect” me from undesirable apps. I’m an adult. I can handle that. I’m not a lawyer but there is certainly some level of “monopolistic” behavior happening on the part of Apple when they have absolute control over which apps are allowed in the App Store.

There's always Android. Apple's market differential is their ecosystem, I would like to have that option in our malware infested market. If Apple opens up their system and some developers chose to provide their products only through proprietary means they'll ruin the entire intent of the ecosystem. You can't have a monopoly on your own products. Apple doesn't have a market monopoly, the only reason companies are coming down on Apple is because their ecosystem provides the confidence to their customer to pay for things and thus make a lot of profits. These companies are shooting themselves in the foot, their short sightedness makes them think 'oh, our own App Store?! We'll make billions!!' is rubbish. Android does not provide that level of customer confidence due to the lack of an Apple-like secure ecosystem and therefore they doesn't have the level of sales that the App Store does.

Thank you, a perfect response! I'm beyond done with developers acting like children and stomping their feet on the ground. Apple is not the only player in the market, not even close. To suggest they have a monopoly... Do these people know what a monopoly is? You don't have to develop for Apple. Their platform, and all the support and innovation that goes into it, provides massive markets of third party hardwares and softwares. Like get over it you greedy developers. That comment about Tim Cook v Steve Jobs was real unnecessary and massively catty. Miss me with all of this.

ArchStanton · July 21, 2021 6:15PM

Right now there’s a cottage industry where a company or companies sue Apple and reap the free media exposure. With enough media looking for sensational and a sufficient (and quite a bit farmed) anti Apple online mob, it currently is a can’t lose strategy.

AI and others like it get hits with it too. Many win, the truth certainly doesn’t.

crowley · July 21, 2021 6:34PM

tmay said:

crowley said:

jimh2 said:

If only the plaintiff was made responsible for all legal costs associated with cases, we would no longer have class action lawsuits which only benefit lawyers.

The voice of Corporate America has spoken. As if it isn't already hard enough to sue, let's stack the deck even more and stamp the first amendment into the muck.

This isn't a first amendment related issue.

The first amendment guarantees the right to petition government for a redress of grievances, which is what has been cited as granting the right to sue. If the system is restructured to put undue financial burden on the plaintiff then that right has been eroded.

So how is it not a first amendment issue?

tommikele · July 21, 2021 8:11PM

Cockroaches pretending to be lawyers.

tommikele · July 21, 2021 8:23PM

crowley said:

jimh2 said:

If only the plaintiff was made responsible for all legal costs associated with cases, we would no longer have class action lawsuits which only benefit lawyers.

The voice of Corporate America has spoken. As if it isn't already hard enough to sue, let's stack the deck even more and stamp the first amendment into the muck.

Are you serious? Any moron who can pay the filing fee can sue anyone for anything. It’s absurdly easy to file a lawsuit. Your supposition about the 1st Amendment is pathetically laughable. Plaintiffs bringing a merit less action or those recruited by a lawyer to be a plaintiff should absolutely be held financially responsible if their claim is found to be without merit. Who do you think pays for that garbage? We do every time we buy something. Do you think Apple, Google, Microsoft, Amazon or any of the rest are not passing that cost on to us? Make the lawyers responsible and you will quickly find meritless cases disappear and solid ones get settled quickly without years of delays.

Rayz2016 · July 21, 2021 11:18PM

dysamoria said:

Uh, developers of “free apps”? Free as in loaded with ads or in-app purchases? Or were they *actually* free?

I do think Apple have changed from one company to another, and not for the better, but this specific argument of monopoly still doesn’t work. There’s something in there that’s anticompetitive practices, but monopoly isn’t really it.

Yup, “something in there”, but as usual, you don’t know what it is.

FileMakerFeller · July 21, 2021 11:34PM

AppleInsider said:

"The consumer is unaware of the existence of developers, if they aren't approved and promoted by Apple," it continues. "The merchant of record for all iPhone app purchases is indeed Apple."

"Clearly, Your Honour, there is no other way of making consumers aware of our product, which self-evidently is worthy of attention because it is free and obviously of incredibly high quality because it is free."

Developers of free apps seek $200 billion damages, claim Apple restrains trade

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