Apple Fights False Advertising Class Action on IPhones

SAN FRANCISCO (CN) — Urging denial of class certification, an Apple attorney told a federal judge Thursday that the Silicon Valley giant did not trick customers into paying more for iPhones with false promises about data security.

“They know they can’t get damages for Apple making general statements about security and privacy,” Robert Hawk told U.S. District Judge Jon Tigar.

The lawsuit began in 2013 when lead plaintiff Marc Opperman sued Apple and a host of app developers that downloaded iPhone users’ contacts data without their knowledge or consent. The plaintiffs sought class certification in August last year.

The plaintiffs claim Apple owes iPhone buyers restitution for making false representations about the privacy and security of their phone data.

Specifically, the plaintiffs say Apple advertised that each offering in its app store was “curated” to meet privacy standards and that a “sandboxing” security feature prevented apps from accessing iPhone data without consent.

Hawk told Tigar that plaintiffs’ attorneys pushing the theory of a deceptive “Big Tobacco-style, long-term advertising strategy,” lack evidence of any “uniform misrepresentation” made to consumers.

Plaintiffs’ attorney Michael von Loewenfeldt replied that this case is not about “a specific set of words that was said to everybody.” Rather, it’s about a common theme: “that it’s safe to put your data on this phone,” he said.

Hawk said the plaintiffs failed to show most class members were exposed to misrepresentations in third-party blogs, technical documents, website statements or a Steve Jobs speech about iPhone privacy protections.

“There’s no evidence of consumer reach on any of those sources,” he said.

But Von Loewenfeldt urged the judge to consider “a ton of circumstantial evidence” on Apple’s security-focused branding campaign, including the harsh public reaction in 2012 after it was revealed that apps were stealing iPhone users’ private data.

Tigar appeared unwilling to buy that argument.

“Isn’t there a limit to that logic?” Tigar asked. “If there must be a representation out there, then they must be easy to find.”

Hawk also attacked a damages model proposed by plaintiffs’ expert Elizabeth Howlett, who proposed estimating the value iPhone users place on privacy and how much extra they paid for iPhones due to false assurances about data security.

Apple contends that Howlett’s model can’t measure damages as defined by the class because she “has no idea how many potential class members were exposed to statements about sandboxing,” according to Apple’s opposition brief.

Also debated Thursday was whether a “choice of law” provision in Apple’s terms and conditions requires that California law apply to all claims against Apple, including to those of class members in different states.

Apple claims the choice-of-law provision applies only to issues arising from its iPhone license, and false advertising claims must be interpreted under separate state laws. The differences in each state make nationwide class certification impractical, Apple says.

After almost an hour of debate, Tigar took the arguments under advisement.

Tigar on Thursday also tentatively approved a $5.3 million settlement in the same case with Twitter, Instagram, Yelp, Foursquare, Foodspotting, Gowalla, Kik Interactive and Kong Technologies, which acquired the social media app Path.

Hawk is with Hogan Lovells in Menlo Park; Von Loewenfeldt with Kerr & Wagstaffe in San Francisco.

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