This post discusses two different App Store antitrust class actions pending in the Northern District of California (before different judges) and Apple's related motions to dismiss. I'll start with the Affinity v. Apple case over Apple Pay and access to the NFC chip, but if you wish to skip right to the French publishers' U.S. antitrust action, just click here.
Affinity Credit Union v. Apple: amended complaint contains detailed single-brand market pleadings; Apple withdraws motion to dismiss for now
In mid-July, the class action law firm of Hagens Berman filed a complaint against Apple on behalf of credit card issuers. In October, Apple moved for dismissal, arguing that Apple Pay competes with plenty of other payment methods. A near-simultaneous request by Apple to stay discovery was initially opposed by the class action lawyers, and that opposition brief gave us an idea as to how they would seek to defend their complaint. However, shortly thereafter they announced their intent to amend the complaint, which was possible until yesterday (Friday). And indeed they filed the amended complaint on that day:
The key difference is that the amended complaint pleads facts and contains legal argument related to the banks' single-brand market definition of Tap-and-Pay iOS Mobile Wallets. Market definition is also the part of Epic Games v. Apple that I'm most interested in. It contains of a foremarket and a dissociated aftermarket (Kodak/Newcal precedent). Epic clearly has better arguments than Apple on both.
The original Affinity complaint did not mention the word "foremarket" at all, and "aftermarket" only once (and only in parentheses). The amended one mentions "foremarket" (though they often use the plural--"foremarkets"--which I struggle with) and "aftermarket" several dozen times.
Shortly after the amended complaint was filed, Apple withdrew its motion to dismiss for the time being. I expect them to file a renewed one, but the amended complaint is definitely more defensible.
The Apple Pay case, which is very much about Apple restricting other payment app's access to the iPhone's NFC chip, has a lot of merit. Some of the legal hurdles are higher, however, than the ones Epic is facing (and last year's district court judgment in Epic's case shows it's the opposite of a cakewalk).
Société du Figaro, SAS et al. v. Apple: Apple moves for dismissal
On August 1, the same class action law firm (Hagens Berman)--in cooperation with French antitrust lawyer Fayrouze Masmi-Dazi--filed a complaint against Apple on behalf of major French publishers such as the company that publishes Le Figaro, probably the most famous French newspaper. What I found particularly interesting about it is now also a key target of Apple's motion to dismiss: the complaint seeks an injunction against, inter alia, Apple's App Tracking Transparency (ATT) rules. The fallout from ATT even raises macroeconomic concerns.
Here's Apple's motion to dismiss:
Defendant Apple Inc.'s Motion to Dismiss
It's a motion of the "throw in the kitchen sink" or "leave no stone unturned" kind. Parts of it are unpersuasive. For instance, Apple argues that there is no case over communications restrictions because Apple allows developers (under a recent class action settlement involving the same lawyers) to "send communications outside of the app to their user base about purchasing methods other than in-app purchase." But there still are restrictions for what developers can tell users within an app.
Apple tries to portray this case as--without using that originally French word--encore of the developer class action that the same firm settled with Apple. I do believe that the cases are distinguishable, however, and in particular, ATT was not at issue in that earlier case.
The part that argues the case should be dismissed under the Foreign Trade Antitrust Improvements Act (FTAIA) was expected. It is, at first sight, a bit counterintuitive that French publishers would sue in California. The complaint already anticipated that challenge and addresses any FTAIA questions.
The part that I am most interested in is, as I mentioned before, ATT. Apple argues that the plaintiffs don't have standing, and that is a hurdle I believe the class action lawyers can overcome, but some other points made by Apple are at least somewhat valid. The complaint could state the alleged harm more clearly, and Apple is right that there should be "the definition and analysis of [ATT's] alleged effects in an advertising market, but [the plaintiffs] allege no relevant advertising market."
The ATT part is really important, and it would be wonderful if the class action lawyers could amend their complaint accordingly (as they did in the Apple Pay/NFC case I discussed further above).
