The Supreme Court denied an injunction against Apple Inc. that might have allowed iPhone apps to be distributed outside the company’s proprietary App Store.
App makers had sued Apple, claiming that it had violated antitrust laws, but the U.S. Court of Appeals for the Ninth Circuit rejected the lawsuit late last year.
The Supreme Court’s decision 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 various payment options available outside Apple’s App Store. The commission ordered Apple to halt this conduct. Apple said it planned to appeal the decision to the Luxembourg-based General Court, a process that could take years.
The application for an injunction in Coronavirus Reporter v. Apple Inc. was denied on March 18 in an unsigned order. No justices dissented from the denial. The Supreme Court didn’t provide reasons for its decision. The co-applicants were Coronavirus Reporter, Calid Inc., and Primary Productions LLC.
The request for an injunction had been submitted on Feb. 6 to Justice Clarence Thomas, who referred it to the full court. The justices considered it at their private judicial conference on Feb. 21.
Before that, the application was filed with Justice Elena Kagan on Jan. 15. She denied it on Feb. 5 without explaining why.
The co-applicants developed apps that they wanted to have distributed through Apple’s App Store, which allows iPhone users to download a variety of apps. Bitcoin Lottery and Coronavirus Reporter 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 Ninth Circuit.
The team involved with the app allegedly included Dr. Robert Roberts, a former cardiologist for NASA. Apple rejected the app according to 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.
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 linked together through a peer-to-peer network.
The co-applicants 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 through 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 Ninth Circuit affirmed the district court and dismissed the antitrust claim, finding in November 2023 that the co-applicants didn’t meet a threshold test in antitrust law.
The co-applicants 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 co-applicants 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 co-applicants failed to “identify relevant specific provisions of the Developer Agreement” or show that Apple “breached a specific provision,” the circuit court held.
The agreement gave Apple “sole discretion” to accept or refuse apps for the App Store, according to the court.
The Ninth Circuit also threw out the co-applicants’ 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 fraud claim consisted of allegations that were “vague and conclusory” and lacking the “particularity” legally required by federal rules of civil procedure.
In the emergency application to the Supreme Court, the co-applicants argued that Apple’s immense market power was bad for consumers.
Apple, the co-applicants stated, is “a multi-national empire that controls nearly 80% of internet software, [and] is the largest monopoly in history.”
“Every transaction, swipe, and download within Apple’s ecosystem strengthens its monopolistic grip, often to the detriment of competition and consumer autonomy,” the co-applicants claimed.
“The company’s control extends well beyond the sale of devices—into the very fabric of digitally mediated existence. The curated walled garden of the App Store not only stifles technological diversity but also constrains the consumer’s ability to seek alternatives. This monopolistic strategy has essentially transformed Apple from a hardware manufacturer to a gatekeeper of digital life, shaping behaviors and habits with profound societal implications.”
Coronavirus Reporter attorney Keith Mathews of AWP Legal in Manchester, New Hampshire, said the Supreme Court’s denial of the injunction would not end efforts to rein in Apple.
“We are enthusiastic that Apple will face justice on this important issue,” the attorney told The Epoch Times by email.
“The injunction would have solved the issue outright, and we were hopeful the Court would act, but we are committed to the continued fight against the obvious Sherman Act violations by Apple.”
The Epoch Times reached out for comment to Apple attorney Rachel S. Brass of Gibson Dunn in San Francisco but didn’t receive a reply by press time.
This article by Matthew Vadum appeared March 20, 2024, in The Epoch Times.