Author: Gerald L. Maatman, Jr. and Sean P. McConnell
Duane Morris Takeaway: On February 2, 2024, Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California granted plaintiff’s motion to certify a class of purchasers of one or more iOS applications or application licenses from defendant Apple, Inc. (“Apple” ) or who have paid for one or more in-app purchases since July 10, 2008 in In Re Apple iPhone Antitrust Litigation, no. 4:11-CV-06714 (ND Cal. Feb. 2, 2024). The court rejected the defense’s arguments that class certification should be denied on the grounds that the plaintiffs’ expert model revealed millions of uninjured class members and that individual issues would predominate. Instead, the Court found that the model showed that an estimated 7.9% of the class was uninjured and that with more complete data, the model would be able to demonstrate class-wide antitrust effect.
In Re Apple iPhone Antitrust Litigation is required reading for all corporate counsel handling antitrust class-action litigation involving end-consumer claims.
Case background
The plaintiffs are purchasers of iPhone applications (applications), application subscriptions and/or in-app content through the iPhone App Store. The defendant sells the iPhone and requires the purchase of applications through the App Store. The plaintiffs allege that Apple charges App Store developers supra-competitive commissions that are passed on to consumers in the form of higher prices for app downloads, subscriptions and in-app purchases. Plaintiffs bring claims under ยง 2 of the Sherman Act for unlawful monopolization and attempted monopolization of the aftermarket iPhone applications.
In a previous ruling, the Court denied class certification. He concluded that the plaintiffs failed to establish the predominance requirement under Rule 23(b)(3) because they failed to demonstrate that harm from Apple’s alleged anticompetitive conduct could be proven on a class-wide basis. According to the Court, plaintiffs’ expert methodology failed to reasonably determine how many class members were uninjured by the alleged conduct and individual issues prevailed.
Court decision on class certification
In response to the court’s decision, the plaintiffs narrowed their class definition to include only Apple account holders who spent $10 or more on the app or in-app content.
Using that new definition, plaintiffs filed revised and new expert reports estimating that the proposed class included only 7.9% of uninjured members and again moved for class certification under Rule 23(b)(3). Since the Court’s prior ruling, the Ninth Circuit has also rejected the argument that “Rule 23 does not permit certification of a class that potentially includes more than a de minimis number of uninjured class members.” Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods LLC, 31 F. 4th 651, 669 (9th Cir. 2022). According to the Court, the revised model can show the impact of Apple’s allegedly anticompetitive conduct on all class members, and once Apple produces the rest of its app transaction data, the model will be able to calculate the exact extent of damages suffered by each class member. Under, under OleanThe court concluded that the plaintiffs meet the condition of supremacy.
Consequences for defendants
In Re iPhone Antitrust Litigation is another example of a federal court decision on class certification that points to the existence of common conduct that causes injury. The court admitted evidence that might be too inclusive at the class certification stage of the proceeding, but nonetheless capable of showing the impact of the allegedly antimarket conduct on all class members at trial.