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Developers of free apps seek $200 billion damages, claim Apple restrains trade

App Store

Two developers, including the maker of "Coronavirus Reporter," say Apple unfairly promotes certain free apps in the App Store, and want $200 billion in damages for themselves and other similarly-affected companies.

The long-running legal dispute between Apple and the developer of "Coronavirus Reporter," came to a head in early July, 2021. The developer withdrew its antitrust case, intending to instead refile it as a class action one alongside other developers.

"Coronavirus Reporter" and a second company, Calid Inc, have now joined forces to represent "themselves and all others similarly situated." A new class actions suit has been filed with the US District Court for the Northern District of California. Full text is below.

"This class action seeks to redress the injustices Apple committed to the developer base that the monopoly necessarily relies upon to exist," says the filing. "Documented herein are the anti- competitive business practices that have become the norm at Apple, and how they have harmed Coronavirus Reporter, CALID (CALendar IDentifier scheduling platform), and countless other class members that shall be identified in expedited discovery."

The filing draws parallels with the Department of Justice's historical anticompetition case against Microsoft. It notes that Microsoft was accused despite, for instance, not rejecting apps, nor charging a fee to be a registered developer.

"Apple, by breathtaking comparison, has secured its position as the wealthiest company in the world by committing all of those enumerated crimes under the guise of popularity and commitment to quality," continues the filing. "There can be little doubt that Tim Cook sought to compensate for the tragic loss of Steve Jobs - and his gift for innovation - by seeking reckless profits on the heels of the success that Apple enjoyed with the iPhone."

The two developers describe a "stealth transition" from Apple's "past days of creative good," into how "the company now operates as a stealth monopolist."

Credit: Apple
The original case concerned, in part, Apple's planning to launch its own COVID-related technology with Google.

Key to "Coronavirus Reporter" and Calid's filing is this issue of monopoly. Despite multiple cases failing to get the App Store to come under the aegis of the Sherman Act, thee two developers are attempting exactly that.

"Apple controls nearly 80% of the commerce transactions that occur over this device group [smartphones]," says the filing. "In this model, Apple sells to the consumer a bundle of hardware and software."

"The consumer is unaware of the existence of developers, if they aren't approved and promoted by Apple," it continues. "The merchant of record for all iPhone app purchases is indeed Apple."

The filing proposes that other cases have neglected "to formulate Sherman definitions that equally apply to free apps." These two developers want to redefine the Sherman Act to make the App Store liable, because free apps represent "a major component of the ecosystem and a significant source of lost 'person-years' of work."

"Coronavirus Reporter" restates its previous complaints that Apple blocked its COVID app, complaints that Apple has described as "cavalier."

Apple blocked the app citing the developers' insufficient medical background. "Coronavirus Reporter" notes that it counts a head NASA cardiologist among its team, and now believes that Apple chose to promote a different free app in its place.

"About one month after rejecting [our] app, Apple permitted several employees at a London teaching hospital to distribute a COVID app on the App Store that functioned nearly identically to Coronavirus Reporter," continues the filing. "That competing app obtained the so-called first mover advantage, and is currently used by five million individuals daily."

The filing does not name the competing app, but does later refer to one produced by Guy's and St Thomas's NHS Foundation Trust in the UK. The case argues that even though this particular rival was "sponsored by an institution," it was "primarily the work-product of several individuals," as was "Coronavirus Reporter."

Calling the approval of one such app an example of Apple's "breathtaking arbitrary standards," the suit calls the specific blocking of "Coronavirus Reporter" as an "intentional, flagrant restraint of trade."

Consequently, the suit calls for at least $90 million in damages for every one of an estimated 500 apps that were allegedly "suppressed or rejected." The total damages asked for "approaches $200 billion when ten years of $99 developer fees are factored in."

The suit also wants the creation of an "independent, and impartial App Court," to prevent anti-competitive behavior.