Apple Shouldn't Move Virus App Monopoly Suit, Rival Says

By Lauren Berg
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Law360 (March 25, 2021, 8:58 PM EDT) -- A coronavirus tracking application developer told a New Hampshire federal court Thursday that it shouldn't transfer to California its case alleging Apple used trumped-up excuses to keep competing tracking apps out of the App Store.

Coronavirus Reporter objected to Apple's bid to move the $800 million lawsuit to the Northern District of California, saying the tech giant's "forum-selection clause" in a developer program license agreement is unenforceable because the antitrust claims "stand on their own" and don't simply elaborate on contract claims.

"Apple arbitrarily and capriciously manages the App Store to benefit itself, even if that means restricting access to the national internet backbone," Coronavirus Reporter said. "That claim stands on its own, and would exist whether or not the Apple developer agreement dispute existed."

"The fact that Apple forces developers to agree that it has 'sole discretion' to regulate access to the internet (i.e. approve an app), does not defeat any and all Sherman Act claims, nor does it convert them all to contract claims," the company added.

Coronavirus Reporter first filed suit in January, arguing there was "no good reason" for Apple to block its app from being made available in the App Store in March 2020, just as the virus was beginning its deadly march across the country — except that Apple knew it had its own application in the pipeline.

The rejection, according to the suit, was couched in Apple's decision to permit coronavirus-related applications from only "recognized institutions such as government, hospital, insurance company, NGO, or a university." In response to a Coronavirus Reporter petition, Apple purportedly agreed to also accept "deeply credentialed" health care companies but was unpersuaded by the fact that the plaintiff had hired as its chief medical officer Robert Roberts, inventor of "the gold-standard test" for detecting heart attacks and head NASA cardiologist during the space race.

The suit accuses Apple of illegal monopolization based on the premise that because so many people rely on Apple's iOS operating system, the tech behemoth holds a "de facto monopoly" on accessing the internet. Coronavirus Reporter has also recently added claims for breach of contract and breach of Apple's obligation to deal in good faith.

The price tag, added in the amended complaint filed earlier this month, includes "damages in excess of two hundred million dollars, based on comparable analysis of similar coronavirus information media distribution channels," as well as triple damages under antitrust law "amounting to six hundred million dollars." Coronavirus Reporter also wants a permanent injunction that would bar Apple from blocking internet access for "reasonable applications."

In its Thursday opposition to Apple's motion, Coronavirus Reporter rejected the tech giant's argument that the Northern District of California would benefit the judicial economy because it is the venue for the majority of antitrust claims against the company, noting that a case in Delaware — Blix v. Apple  — has not been transferred to California.

In fact, the app developer said, the Blix case has significant overlap with the present suit over Apple's allegedly anti-competitive App Store policies. Meanwhile, according to the opposition, the cases in California's Northern District concern an entirely different subject — the allocation of profits to popular apps like Epic Games' Fortnite.

"It is henceforth clear that discovery, contrary to Apple's suggestion, will cover almost entirely different aspects of Apple's internal workings," Coronavirus Reporter said. "There exists little reason to consolidate with seemingly unrelated cases pending in Northern California."

Coronavirus Reporter said Apple's motion to transfer the case to California should be denied.

Representatives for the parties did not immediately respond to requests for comment Thursday.

Coronavirus Reporter is represented by Keith Mathews of Associated Attorneys of New England.

Apple is represented by Kevin M. O'Shea and Allyson L. Moore of Sulloway & Hollis PLLC and Jessica E. Phillips and Martha L. Goodman of Paul Weiss Rifkind Wharton & Garrison LLP.

The case is Coronavirus Reporter v. Apple Inc., case number 1:21-cv-00047, in the U.S. District Court for the District of New Hampshire.

--Additional reporting by Bryan Koenig and Nadia Dreid. Editing by Daniel King.

For a reprint of this article, please contact reprints@law360.com.

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Case Information

Case Title

Coronavirus Reporter v. Apple, Inc.


Case Number

1:21-cv-00047

Court

New Hampshire

Nature of Suit

Anti-Trust

Judge

Landya B. McCafferty

Date Filed

January 19, 2021

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