In 2019, the U.S. Supreme Court took iPhone users one step closer to bringing a major antitrust lawsuit against Apple to trial when it ruled that App Store customers.
You can sue the company for using its monopoly power to raise charges for apps and in-app purchases.
But now they face a new hurdle – convinced a federal judge to witness a class of millions of Apple customers paying for iOS apps and in-app content through the App Store.
The case, now in its tenth year, was first arrested by Robert Pepper, Stephen Schwartz, Edward Hayter and Eric Terrell in 2011. It was dismissed by a federal judge in 2013 under key antitrust custody in Illinois Brick Co .. v. Illinois. where the Supreme Court ruled that alleged monopolists could only be prosecuted by people directly affected by corporate behavior, not by indirect agents. A 2019 ruling written by Judge Brett Kavanaugh said the plaintiffs are direct buyers under Illinois brick since they bought the materials directly from Apple.
Lawyers for Apple told U.S. District Judge Yvonne Gonzalez Rogers on Tuesday that it was not possible to determine the number of iPhone users injured by the Apple App Store monopoly.
“In order to witness class corruption, the plaintiffs need to come up with a strong model to address the vulnerability of all or almost all of the plaintiffs. It means more than a large number of class members need to be injured, ”said Cynthia Richman, a lawyer with Gibson Dunn, who represented Apple.
Apple won the controversy with a corruption model offered by economist Daniel McFadden, a professor of sociology at the University of California Berkeley. McFadden analyzes what Apple benchmark rates would have cost developers in but-for-global competition. Apple is currently charging a 30% discount on retail sales, although a deal with minority executives approved on Tuesday reduced that rate to 15% for three years.
Apple argued that the McFadden model accounted for a substantial number of proposed class members who did not disclose damages, and McFadden concluded that Apple would have charged 10% to 12% of non-Apple app stores Apple iOS allows us to.
Gonzalez Rogers again asked for those portions at Tuesday’s hearing, saying McFadden appeared to be pulling the numbers out in the thin air.
The consultant for the proposed class stated that the model is a reliable method of determining class-wide damages. When asked by Gonzalez Rogers about the percentage of uninjured members, Aaron Panner representatives including Kellogg, Hansen, Todd, Figel and Frederick said customers who made purchases from the store had antitrust damage whether or not they in damages.
“There is antitrust effect from the fact that the Apple Store does not offer the options they would have provided in a competitive market, that they do not have the innovations they would have had in a competitive market,” Panner said. “So they have antitrust damage regardless of whether they have serious damage.”
The accuracy of the model is not the only obstacle to an ongoing case, as Gonzalez Rogers has previously written a product proposal for an Apple device and a related product for iOS and IAP applications in his judgment in another high profile case on Apple Store Store Policies.
“Simply put, it is unwise to argue that the product is for something unlicensed or sold to anyone,” he wrote in his judgment in a case where Epic, the maker of the popular video game Fortnite, confronted Apple’s App Store. policy and 30% Commission rate as anticompetitive. “Given the rejection of the court of market-leading technology, post-market technology fails as it relates to the market,” he added.
The judge said that iPhone user complaints seem to ignore this. “I am not surprised that both parties have chosen to use my authority for their own purposes,” he said, noting that iPhone users have defined their product in exactly the same way as Epic Games. “I find he has no legs.”
Panner said the important point is that all customers are subject to the same anticompetitive restrictions in the retail market for iPhone apps because Apple is blocking other iOS app stores.
Plaintiff’s attorney Mark Rifkin said the App Store looks like a great store for apps and in-app purchases. “Apple has forced consumers who buy iPhones and iPads to shop only in one place,” he said. “And they’ve been very successful and they’ve been effective against not only competition but selection.”
He said the McFadden method would be used to calculate damages using the current $ 400 million Apple IDs.
Rifkin was a co-owner with Gonzalez Rogers when asked for the total amount of damage but finally said he believed it was around $ 7 billion to $ 10 billion.