In the previous post I acknowledged that Apple has a reasonable basis to challenge the UK Competition & Market Authority's market investigation reference over mobile browser engines and cloud gaming. But in some other respects, Apple is the Evil Empire, extremely unreasonable, and acts in highly abusive ways.
A class-action lawsuit brought by French publishers over the way Apple's App Store terms and policies affect them puts Apple's utter unreasonableness on full display. Apple unilaterally imposes a forum-selection clause on app developers: Northern District of California. But when foreign developers actually sue there, as do those French media companies, Apple argues that the Foreign Trade Antitrust Improvements Act (FTAIA) bars such claims.
As Epic Games CEO Tim Sweeney once mentioned in a tweet I haven't been able to find again (search is an area in which Twitter has huge room for improvement, and using Google to search Twitter is also suboptimal), Apple's position taking in different jurisdictions often amount to denying liability under the antitrust laws of any jurisdiction. Epic filed lawsuits in the U.S. (where a Ninth Circuit panel is now working on its decision), UK, and Australia, and Apple then moved to dismiss or stay the foreign cases in light of the California action, but in California argued that any remedies could not apply to foreign markets.
If one thinks it through, Apple's positions across jurisdictions are just another expression of the neofeudalist attitude of an arrogant and abusive organization that knows no shame: the tyrannical dictator forces developers to sign agreements that bar them from suing anywhere other than in the Northern District of California, and then tells foreign developers serving foreign target markets that they have no rights under the antitrust laws of the United States "because FTAIA".
In the end, only entities who are not bound by Apple's unilaterally-imposed developer agreement would be able to bring antitrust cases in foreign jurisdictions: competition authorities and, maybe, consumers.
Heads I win, tails you lose. Or: What's mine is mine, what's yours is mine, too. That behavior, in and of itself, constitutes an abuse.
The case (Société du Figaro et al. v. Apple) was already filed in August (in the Northern District of California), Apple responded with a motion to dismiss in October, and as I suggested at the time, the complaint was subsequently amended:
On Friday, Apple renewed its motion to dismiss:
Apple describes "plaintiffs' purely foreign claims" as "[t]ransactions between French developers and foreign consumers, made on foreign App store storefronts, in foreign currency, and through a foreign (non-party) Apple entity" as "foreign nonimport commerce, not subject to any FTAIA exception."
Apple says "short shrift" should be given to the French publishers' argument involving the developer agreement's U.S. choice-of-law provision. Apple points to a Second Circuit decision (Lotes Co. v. Hon Hai Precision Industry, the latter being Foxconn, Apple's largest contract manufacturer) where the holding was that a party to such an agreement "remain[s] free to argue that, under the FTAIA, the Sherman Act does not apply to or regulate the conduct at issue in this case."
The 2nd Cir. decision is not binding in the 9th Cir., and therefore not on Judge Yvonne Gonzalez Rogers. One can reasonably disagree with it. But this is just one of several arguments made by the French publishers as to why the FTAIA does not bar their U.S. federal lawsuit with respect to foreign sales.
Those companies also offer their apps to U.S. consumers, but presumably their U.S. revenues are minuscule compared to the ones in France and other French-speaking countries and regions. So the FTAIA would not dispose of the entire case, but if Apple prevailed on its FTAIA argument, it would render the litigation commercially insignificant.
I plan to comment on the other elements of Apple's motion to dismiss as the briefing process unfolds. Apple really doesn't want to deal with litigation over its pernicious App Tracking Transparency (ATT) framework, and argues that the French publishers still don't get market definition right and, in any event, lack standing to challenge ATT. As for the market definition underlying the publishers' App Store claims, Apple expressly reserves the right to oppose their single-brand market definition, but does not raise that question at the motion-to-dimiss stage. What I think may be the focal point of the discussion at the motion-to-dismiss hearing is Apple's argument that the settlement in the Cameron v. Apple developer class-action litigation resolved the key issues, and now the same law firm (Hagens Berman) is suing Apple again, but with different plaintiffs (and now even challenging the reduced 15% app tax).
I'm one of those developers who consider the Cameron settlement's terms extremely unsatisfactory. The French publishers' case has more potential because that's a group of reasonably large and sophisticated plaintiffs who are not going to settle for a Cameron-style set of terms.
By the way, one developer wrote a letter to Judge YGR earlier this month, complaining that even though he's clearly a member of the class and is entitled to "a substantial sum" per the outcome of the Cameron litigation, he was not contacted about the settlement:
It's unknown whether this was just an oversight or clerical error affecting a single developer or whether there's a more fundamental problem.
