Apple iPhone App Monopoly Suit Dismissed

Apple Inc. won dismissal Thursday of a class action suit by iPhone uers who claimed the company illegally monopolized the voice and data services aftermarket.  U.S. District Judge Yvonne Gonzalez Rogers approved Apple’s motion to dismiss the 2011 lawsuit but did give the class members a second chance to amend the complaint.

Rogers found the consumers failed to show they had standing to sue Apple.

The suit covered all people who bought an iPhone in the U.S. and entered a two-year contract with AT&T Mobility for iPhone voice and data service anytime after June 29, 2007.

After the U.S. Supreme Court decided a separate issue allowing compelled arbitration by AT&T in disputes with the phone company, the current class suits went ahead against Apple, know as Apple II litigation, filed in 2012.

Consumers allege Apple entered into a secret five-year contract with AT&T Mobility, which is no longer part of the lawsuit, to establish AT&T as the exclusive provider of cell phone voice and data services fro iPhones through 2012.

The effect was to lock in users for five years and prevent switching away from AT&T.

Apple also allowed creation of applications (apps) for the phones, sharing proceeds of sales with developers 70/30, but refusing to honor iPhone warranties for customers who downloaded competing apps.

The lawsuit claims Apple engaged in monopolistic behavior in these two aftermarkets.

Apple argued successfully that no consumer alleged he or she ever purchased an app or was overcharged, that any overcharge was a result of wrongful conduct, nor that the named plaintiffs suffered an injury.

“At a minimum, plaintiffs must allege facts showing that each named plaintiff has personally suffered an injury-in-fact based on Apple’s alleged conduct,” Rogers said.  “This requires that plaintiffs at least purchased applications,” she said.

She said they failed to show that, but gave the consumers a chance to amend their lawsuit to comply.

Case: In re:  Apple iPhone Antitrust Litigation, No. 11-cv-6714YGR



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