Supreme Court won’t hear app developers’ antitrust suit against Apple

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The Supreme Court refused on May 13 to take up the case of app developers who accuse Apple of antitrust violations for refusing to make COVID-19 tracking and bitcoin apps available in the company’s App Store.

App makers had sued Apple, claiming the Silicon Valley giant had violated antitrust laws and that its refusal to allow its apps constituted censorship, but the U.S. Court of Appeals for the 9th Circuit rejected the lawsuit late last year.

The petition for certiorari, or review, in Coronavirus Reporter v. Apple Inc. was denied in an unsigned order. No justices dissented from the denial.

The Supreme Court didn’t provide reasons for its decision. At least four of the nine justices must vote to approve a petition for the case to move forward to the oral argument stage.

The denial came after the U.S. Department of Justice filed its own antitrust lawsuit against Apple in federal court in New Jersey in March.

The Biden administration alleges that the company has monopoly power in the smartphone market and “illegally maintains a monopoly over smartphones by selectively imposing contractual restrictions on, and withholding critical access points from, developers.”

Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division said, “For years, Apple responded to competitive threats by imposing a series of “Whac-A-Mole” contractual rules and restrictions that have allowed Apple to extract higher prices from consumers, impose higher fees on developers and creators, and to throttle competitive alternatives from rival technologies.”

“Today’s lawsuit seeks to hold Apple accountable and ensure it cannot deploy the same, unlawful playbook in other vital markets,” he said.

Apple denied wrongdoing and promised to fight the government-initiated lawsuit.

The decision also came after the European Union’s antitrust authority fined Apple 1.8 billion euros (about $1.95 billion) on March 4 for unfair trading policies.

The European Commission charged Apple in 2023 with blocking Sweden-based streaming service Spotify and others from making users aware of payment options available outside the App Store. The commission ordered Apple to cease that conduct.

Apple said it planned to appeal the decision to the Luxembourg-based General Court, a process that could take years.

Coronavirus Reporter, an app developer, previously had asked the Supreme Court for an injunction against Apple Inc. that might have allowed iPhone apps to be distributed outside the company’s proprietary App Store, but the court denied the application on March 18.

Coronavirus Reporter and co-petitioners developed apps that they wanted to have distributed through Apple’s App Store, which allows iPhone users to download a multitude of apps. Bitcoin Lottery and the Coronavirus Reporter app were not approved for the App Store.

The Coronavirus Reporter app was to collect “bioinformatics data” from users about COVID-19 symptoms that the app would then share with “other users and [unidentified] epidemiology researchers,” according to the 9th Circuit.

The team involved with the app allegedly included Dr. Robert Roberts, a former cardiologist for NASA. Apple rejected the app in accordance with its policy requiring that any apps related to COVID-19 be presented by a recognized health entity such as a government organization or medical institution.

No Blockchains

Apple turned away Bitcoin Lottery, a blockchain app, under its policy “generally [blocking] blockchain apps.” A blockchain is a ledger of transactions, including those made involving cryptocurrency, which exists on computers that are connected through a peer-to-peer network.

The app developers sued Apple for antitrust violations under the federal Sherman Act, breach of contract, racketeering, and fraud, claiming that Apple operated the App Store as a monopoly by curating and censoring apps.

They argued that they wanted to vindicate the right of iPhone users to “enjoy unrestricted use of their smartphones” to run “innovative applications, written by third-party developers.”

A federal district court in California dismissed the lawsuit and later denied motions for reconsideration and a preliminary injunction against Apple.

On appeal, the 9th Circuit affirmed the district court and dismissed the antitrust claim, finding in November 2023 that the developers didn’t meet a threshold test in antitrust law.

The developers failed to demonstrate that Apple possessed “a market share in a relevant market sufficient to constitute monopoly power, and they didn’t show that there were existing barriers to entry to that market, as required for a Section 2 claim” under the Sherman Act.

Nor did the developers show that Apple “undertook anticompetitive conduct in that market sufficient to harm the competitive process as a whole.”

The breach of contract claim failed because the developers failed to “identify relevant specific provisions of the Developer Agreement” or show that Apple “breached a specific provision,” the circuit court determined.

The agreement gave Apple “sole discretion” to accept or refuse apps for the App Store, according to the court.

The federal circuit court also threw out the developers’ claim that Apple committed fraud and violated the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. Their claim made Apple “as a corporation both the enterprise and the RICO defendant, which is not permitted in a RICO claim,” the court found.

The court determined that the fraud claim consisted of allegations that were “vague and conclusory” and lacking the “particularity” required by federal rules of civil procedure.

The RICO Act, enacted in 1970, allows prosecutors to go after organized criminal activity and racketeering. RICO adds to existing criminal penalties and creates new civil causes of action for things done as part of an organized criminal enterprise.

In its petition to the Supreme Court, which was dated April 3, Coronavirus Reporter criticized Apple for saying in a brief that “censorship is not an antitrust injury.”

Apple’s position during the lawsuit has been “wholly inexcusable and necessitates a clear correction[.]”

“Apple’s censorship declaration is at odds with centuries of competition law,” according to the petition.

Citing an English legal precedent dating back to 1602, the developer said, “censorship by a monopoly is an injury to society at large, because it promotes idleness[.]”

Apple did not respond to the petition. The company’s lawyers filed a waiver of Apple’s right to respond on April 12.

The company did not explain its decision.

This article by Matthew Vadum appeared May 13, 2024, in The Epoch Times. It was updated May 15, 2024.