SAN FRANCISCO (CN) — Apple clashed with app developers in a federal judge’s Zoom courtroom on Thursday over claims that it rejects certain apps to protect its own self-interest and monopoly power.
Dr. Jeffrey Isaacs, who created the apps “Caller-ID” and “WebCaller,” told U.S. District Judge Edward Chen that he and other developer plaintiffs are prevented from competing with Apple on two fronts, app creation and distribution. Along with $200 billion in damages, they want an injunction that would bar Apple from keeping certain apps out of its App Store and charging developers a $99 yearly App Store submission fee.
Isaacs is joined by Coronavirus Reporter, an app developed “to capture and obtain critical biostatistical and epidemiological data as it happened,” according the complaint. Completed in March 2020, Apple turned it down for not being affiliated with a “recognized institutions such as government, hospital, insurance company, NGO, or a university” and for containing “user-generated data has not been vetted for accuracy by a reputable source.”
Meanwhile, Apple distributed a nearly identical Covid-19 app on the App Store and partnered with Google to create its own contracting-tracing app.
“Apple’s conduct exploiting its market power substantially forecloses competition amongst emergency COVID pandemic response apps,” the developers say in their motion for a preliminary injunction filed back in August, adding that the tech giant wields "authoritarian control” over what they call the “smartphone enhanced national Internet backbone.”
“The United States government spent decades building what is now known as the Internet. Subsequently, we as a nation collectively invested in putting a smartphone, an amalgamation of sensors, software, and communication devices, in the hands of nearly every citizen, forming a network with capabilities amounting to fantasy of science-fiction of prior generations,” they explain, adding that iPhone users should enjoy unfettered use of these devices to run whatever apps they please.
At stake, they argue, is the innovation and dynamism that drives the American economy.
"[H]undreds of thousands of person-years of our best developers are being discarded by Apple’s tyrannical greed," the motion colorfully adds.
For Chen, the case hinges on whether the developers can define a relevant market. At Thursday’s hearing on both the injunction motion and Apple’s motion to dismiss, he pressed Isaacs to explain how developers have been suppressed.
“What is the access issue here — the smartphones themselves, or the store?” Chen asked.
It's the devices themselves, he said. Since millions of people use iPhones exclusively, Apple can effectively control whose apps are available and how information is exchanged on the internet.
“They [Apple] select who gets access to that network effect of iPhones," he said. "We’re really talking about the physical; 180 million physical devices and how Apple controls access to that."
That’s all well and good, Apple attorney Rachel Brass told Chen, but in the end, it doesn’t form the basis of a valid antitrust complaint. She said the developers had still failed to allege a relevant market for their claims.
“If the complaint is about access to the store then smartphones are not the relevant market,” she said. “You have to be a competitor in the relevant market, and none of the plaintiffs here are smartphone manufacturers.”
Chen also questioned Isaacs on the seeming lack of competitive injury.
“It's not like Apple is trying to sell a competing app and icing people out; it is unhappiness with getting access to the store. How is that an injury to general competition?” he asked. "There's individual grievances but how is that anticompetitive injury?”
Isaacs said he and other developers have been effectively foreclosed from competing with Apple.
Echoing some of the arguments from a recent bench trial where Fortnite maker Epic Games challenged Apple’s tight control of its App Store, Isaacs said developers would like to see it open up to competition.
“We’d like to be distributors of apps, but we’re being disallowed from competing with Apple there,” he said. “The only way to distribute an iPhone app is the App Store and it should be open,” he said.
Brass said the developers have only shown injury to themselves, not to competition for iPhone apps.
“For example, for the Covid-19 app, the plaintiff alleges there are thousands of apps for Covid-19 that have been allowed onto App Store. So that's not an injury to competition, that's an injury to Coronavirus Reporter,” she said.
Chen took arguments under submission.
Follow @MariaDinzeo
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