Case 3:21-cv-08819 Document 1 Filed 11/12/21 Page 1 of 24
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`BETSY C. MANIFOLD (182450)
`manifold@whafh.com
`RACHELE R. BYRD (190634)
`byrd@whafh.com
`WOLF HALDENSTEIN ADLER
` FREEMAN & HERZ LLP
`750 B Street, Suite 1820
`San Diego, CA 92101
`Telephone: 619/239-4599
`Facsimile: 619/234-4599
`
`MARK C. RIFKIN (pro hac vice forthcoming)
`rifkin@whafh.com
`THOMAS H. BURT (pro hac vice forthcoming)
`burt@whafh.com
`MATTHEW M. GUINEY (pro hac vice forthcoming)
`guiney@whafh.com
`WOLF HALDENSTEIN ADLER
` FREEMAN & HERZ LLP
`270 Madison Avenue
`New York, NY 10016
`Telephone: 212/545-4600
`Facsimile: 212/545-4653
`
`Counsel for Plaintiffs
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`UNITED STATES DISTRICT COURT
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`FOR THE NORTHERN DISTRICT OF CALIFORNIA
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`MADELEINE LEPESANT and MARIANNE
`BOYLES, on behalf of themselves and all
`others similarly situated,
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`Apple Inc.,
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`v.
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`Plaintiffs
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`Defendant.
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`Case No.
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`CLASS ACTION COMPLAINT
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`DEMAND FOR JURY TRIAL
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`CLASS ACTION COMPLAINT
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`Case 3:21-cv-08819 Document 1 Filed 11/12/21 Page 2 of 24
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`Plaintiffs Madeleine Lepesant and Marianne Boyles (“Plaintiffs”), for their class action
`complaint, allege upon personal knowledge as to themselves and their own actions, and upon
`information and belief, including the investigation of counsel, as follows:
`NATURE OF ACTION
`1.
`This is an antitrust class action pursuant to Section 2 of the Sherman Antitrust Act
`of 1890, 15 U.S.C. § 2 (2004) (the “Sherman Act”) and California’s Unfair Competition Law, Cal.
`Bus. & Prof. Code § 17200, et seq. (the “UCL”), brought by Plaintiffs on their own behalf and on
`behalf of a class of persons similarly situated, those being persons who purchased software
`applications or licenses for software applications from the “iTunes” site or “App Store” owned and
`operated by Defendant Apple Inc. (“Apple”), or who made in-app purchases (defined herein)
`through such applications, for use on one or more Apple iPhones, iPads, or iPod Touches (“iOS
`Devices”) between December 29, 2007 and the present (the “Class Period”).1
`A.
`Summary Of Material Facts
`2.
`With great fanfare, Apple launched its first iPhone, called the iPhone 2G, on June
`29, 2007. Prior to and after its launch, Apple hailed the iPhone as a revolutionary, “breakthrough”
`“smartphone” that functioned like a mobile computer with desktop-class email and other Internet
`communications capability. Apple built the iPhone’s operating system, known as “iOS,” to enable
`iPhone users to download and run computer-like software programs (called “applications” or
`“apps”) to browse the Internet, transform music into cell phone ringtones, take photos, play games
`and engage in other functions typically performed on desktop or laptop computers.
`3.
`Shortly thereafter, on September 14, 2007, Apple introduced the first iPod Touch, a
`hand-held computer similar to the iPhone, which operates on the iOS system and can run apps that
`run on the iPhone. On April 3, 2010, Apple introduced the first iPad, a tablet computer with a
`touch screen interface, utilizing, like the iPhone and the iPod Touch, the iOS operating system,
`and able to run apps that function on those devices.
`
`
`1
`The term “iPad” as used herein includes all iPad Pro, iPad Mini and iPad Air models as
`well as standard iPads.
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`4.
`Unbeknownst to iOS Device consumers, however, from the time it launched the
`iPhone through the present date, Apple has engaged in an anticompetitive scheme to monopolize
`the aftermarket for iOS applications (including purchases made within applications, such as
`payment for additional application features, full versions of games, and subscriptions for
`renewable access to content and memberships (e.g., Hulu and Spotify) (“in-app purchases”)) in
`order to control and derive supracompetitive profits from the distribution of iOS apps worldwide.2
`As a result of its scheme, Apple has, from introduction of the iPhone 2G in 2007, when the only
`apps available were those that came with the iPhone, through the present, cornered 100% of the
`worldwide distribution market for iOS applications.
`5.
`Apple has succeeded in totally eliminating any and all competition in that multi-
`billion dollar market. Apple’s App Store is the only store in the entire world – online or off-line –
`where the tens of millions of U.S.-based iOS Device owners (and the many tens of millions of iOS
`Device owners worldwide) can buy an iOS app, and Apple’s unlawful monopolization of the apps
`market has enabled Apple to charge and collect a supracompetitive 30% fee from iOS Device
`consumers for each and every one of the billions of iOS apps they have bought since the iPhone’s
`launch thirteen years ago. Consequently, iOS Device consumers nationwide have paid hundreds
`of millions of dollars more for iOS apps than they would have paid in a competitive market.
`6.
`Unlike traditional desktop or laptop computer manufacturers, whose computers’
`operating systems allow consumers to buy software applications from any and all competing
`software distributors, Apple’s iOS system prohibits iOS Device consumers from buying software
`applications from anyone other than Apple.
`7.
`Even Apple’s own iMac and MacBook desktop and laptop computers’ operating
`systems – from which the iOS operating system was derived – allow consumers to buy software
`from whatever source they like and to pay the software manufacturer or distributor directly
`without having to pay an additional fee to Apple. There is no legitimate basis for Apple to treat its
`
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`2
`Herein, references to the market for iOS applications include the market for in-app
`purchases.
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`iOS Devices customers any differently than it treats its iMac or MacBook customers, or to charge
`its iOS Devices customers a 30% mark-up for any and all software they buy for their iOS Devices.
`8.
`But when Apple developed its unique iPhone, Apple took advantage of the heavy
`demand for its novel product to equip it with an operating system that foreclosed iPhone
`consumers from buying software from any source other than Apple. When Apple subsequently
`introduced the iPad and the iPod Touch, it placed the same software constraints on them. Apple
`thus forced those foreclosed iOS Devices consumers to pay Apple a 30% fee for each and every
`iOS app they buy. Stated in antitrust terminology, Apple improperly exploited its relationships
`with customers who purchased Apple’s highly desirable and expensive iOS Devices by locking
`them in, without their knowledge or consent, into an aftermarket for iOS apps monopolized by
`Apple.
`9.
`In addition to exerting anticompetitive control through the direct purchase of apps
`on the App Store, Apple also controls and receives supracompetitive profits on in-app purchases,
`including but not limited to subscriptions.
`10.
`Apple’s contracts with all developers offering content for iOS devices provide that
`Apple obtains 30% of the amount consumers pay for virtually all types of in-app purchases and
`subscriptions. Apple’s establishment of a 30% commission rate has remained static since the
`onset. Apple chose the 30% commission without regard to or analysis of the costs to run the App
`Store.
`11.
`Prior to 2011, users could read content from subscriptions made outside iOS, but
`were limited to a one-time subscription, not recurring subscriptions. In 2011, Apple expanded its
`functionality to allow for the sales of recurring subscriptions when purchased in the App Store but
`required a 30% commission. In 2016, Apple changed its policy such that for long-term
`subscriptions lasting over a year, Apple’s fee is 30% during the first year but goes down to 15%
`thereafter.
`12.
`In late 2020, Apple introduced the Small Business Program. That program reduced
`Apple’s commission to 15% for developers making less than one million dollars. Apple’s
`implementation of the Small Business Program was spurred, in part, by the COVID-19 pandemic
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`but also by litigation and regulatory pressure.
`13.
`Apple also controls what prices developers can charge. It exercises that control by
`insisting that every paid app be priced in dollar increments at $0.99, $1.99, $2.99, and so forth.
`14.
`Apple’s motive for its anticompetitive conduct was simple: Apple did not want its
`iOS Device-related revenue stream to end when a consumer bought an iOS Device, like it
`generally does when consumers purchase iMac and MacBook computers. So Apple concocted
`and maintained a plan to continue generating additional revenues over the entire useful life of
`every iOS Device it sold by cornering the distribution market for iOS applications and charging
`consumers an extra 30% for every app. Through this scheme Apple would profit not only from
`the sales of tens of millions of iOS Devices, it would also profit from each and every one of the
`billions of future apps sales made to Apple’s iOS Devices customers.
`15.
`Apple’s anticompetitive scheme has generated enormous supracompetitive profits
`for Apple. Apple now offers more than 2.22 million apps in the App Store,3 and iOS Device
`consumers worldwide have downloaded apps more than 200 billion times since July 2008.
`According to Sensor Tower, the provider of a leading app analytics platform that aggregates data
`about consumer app downloads and purchases for use by developers, in 2019, the average annual
`in-app spending per active iPhone in the United States reached $100.4 iOS Devices consumers
`have been overcharged billions of dollars for paid apps and in-app purchases during the Class
`Period as a result of Apple’s anticompetitive conduct.
`16.
`That Apple has engaged in unlawful monopolistic behavior with respect to iOS
`apps is perfectly consistent with Apple’s attitude towards antitrust compliance generally. A
`federal district court judge who observed Apple’s attitude towards antitrust compliance during a
`2013 trial found that Apple had unlawfully fixed e-book prices and concluded that Apple as an
`institution simply “does not want to engage in retail price competition” – indeed, “one of its
`
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`3
`See https://www.statista.com/statistics/276623/number-of-apps-available-in-leading-app-
`stores/ (last viewed November 9, 2021).
`4
`See https://sensortower.com/blog/revenue-per-iphone-2019 (last viewed November 9,
`2021).
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`principal goals was the elimination of all retail price competition,” and “it was happy if a result of
`that … was an increase in prices” that “the consumer had to pay.”5
`17.
`That district court further stated that “[t]he record at trial demonstrated a blatant
`and aggressive disregard at Apple for the requirements of the law,” (Hr’g Tr. 17:1-2) even among
`“Apple lawyers and its highest executives” (id. at 17:5-6), and concluded that an injunction was
`needed to ensure that a “comprehensive and effective” (id. at 19:18) antitrust compliance training
`program would be undertaken by “each of Apple’s officers and directors engaged in whole or in
`part in activities relating to the supply of content,” including “apps” (id. at 13:18-20). “Neither
`Mr. [Eddy] Cue,” the Apple executive responsible for Apple’s App Store, nor “his assigned in-
`house counsel, could remember [having] any training on antitrust issues,” and “[t]hey and those on
`their teams need to understand what the law requires and how to conform their business practices
`to the law.”6
`18.
`Apple’s unlawful monopolization of the iOS applications aftermarket from July
`2007 through the present is a direct reflection of Apple’s goal of “eliminating all retail price
`competition” and its culture of disdaining antirust compliance in order to increase the prices its
`customers pay. Through its actions, Apple has unlawfully stifled competition by erecting
`impenetrable barriers to entry to would-be distributors of iOS apps, reduced consumer choice in
`what would otherwise be a robust and competitive iOS software applications marketplace, and
`artificially increased prices for iOS software applications to supracompetitive levels.
`19.
`Apple’s illegal iOS apps monopoly should be enjoined and dismantled, and
`Plaintiffs and the tens of millions of nationwide iOS Devices consumers they seek to represent
`should be reimbursed by Apple for the billions of dollars they have been overcharged.
`B.
`Summary Of Claims
`20.
`In pursuit and furtherance of its unlawful anticompetitive activities, Apple:
`(a) failed to obtain iOS Devices consumers’ contractual consent to Apple’s monopolization of the
`
`5
`Hearing Transcript (“Hr’g Tr.”) at 11:4-5, 33:10-13, U. S. v. Apple Inc., No. 1:12-cv-
`02826-DLC (S.D.N.Y. Aug. 27, 2013), ECF No. 371, filed Sept. 5, 2013.
`6
`Hr’g Tr. at 18:11-13.
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`iOS applications aftermarket, the effect of which was to lock consumers into buying apps only
`from Apple and paying Apple’s 30% fee, even if they wished to buy apps elsewhere or pay less;
`and (b) failed to obtain iOS Devices consumers’ contractual consent to having their iOS Devices
`“locked” to prohibit them from using any app that was not approved or sold by Apple, thereby
`preventing iOS Devices purchasers from downloading and using other apps, called “Third Party
`Apps.”
`21.
`Apple violated Section 2 of the Sherman Act by monopolizing or attempting to
`monopolize the iOS Devices aftermarket in a manner that harmed competition and injured iOS
`apps consumers by reducing output and consumer choice, and by increasing prices for iOS apps to
`supracompetitive levels. Apple’s conduct also violates California’s Unfair Competition Law, Cal.
`Bus. & Prof. Code § 17200, et seq., which prohibits any unlawful, unfair, or fraudulent business
`act or practice.
`22.
`Plaintiffs seek: declaratory and injunctive relief; treble and exemplary damages or,
`in the alternative, restitution; costs; and attorneys’ fees. As for equitable relief, Plaintiffs seek an
`order restraining Apple from selling iOS Devices that are programmed in any way to prevent or
`hinder consumers from downloading Third Party Apps, or minimally, restraining Apple from
`selling or distributing iOS Devices without first obtaining the consumers’ express contractual
`consent to (a) buying apps only from Apple and (b) having their iOS Devices locked to accept
`only apps purchased from Apple.
`
`THE PARTIES
`23.
`Plaintiff Madeleine Lepesant is an individual residing in Altadena, California who
`purchased iOS Devices from Apple, including, but not necessarily limited to, an iPhone in or
`about October 2019, and an iPod Touch in or about October 2012. Plaintiff Lepesant paid Apple
`for iOS apps, in-app purchases and/or subscriptions during the Class Period.
`24.
`Plaintiff Marianne Boyles is an individual residing in Casa Grande, Arizona who
`purchased an iPhone in or about 2021. Plaintiff Boyles paid Apple for iOS apps, in-app purchases
`and/or subscriptions during the Class Period.
`25.
`Defendant Apple is a California corporation with its principal place of business
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`located at 1 Infinite Loop, Cupertino, California 95014. Apple regularly conducts and transacts
`business in this District and elsewhere in the United States. Apple manufactures, markets, and
`sells the iOS Devices, including the iPhone, iPad and iPod Touch, among other electronic devices.
`JURISDICTION AND VENUE
`26.
`This Court has federal question jurisdiction pursuant to the Sherman Act, the
`Clayton Antitrust Act of 1914, 15 U.S.C. § 15, and pursuant to 28 U.S.C. §§ 1331 and 1337. The
`Court has supplemental jurisdiction over Plaintiffs’ state law claim pursuant to 28 U.S.C. § 1367.
`27.
`This Court also has jurisdiction pursuant to 28 U.S.C. § 1332(d)(2) because
`sufficient diversity of citizenship exists between parties in this action, the aggregate amount in
`controversy exceeds $5,000,000, and there are 100 or more members of the proposed class.
`28.
`Venue is proper in this District pursuant to 28 U.S.C. § 1391 because Apple has its
`principal place of business in this District, a substantial part of the events or omissions giving rise
`to Plaintiffs’ claims occurred here, and Apple is a corporation subject to personal jurisdiction in
`this District and, therefore, resides here for venue purposes.
`29.
`Each Plaintiff and member of the Class, in order to purchase an iOS app or make
`in-app purchases, was required to accept Apple’s iTunes terms of service which required lawsuits
`to be filed in courts in the State of California.
`DIVISIONAL ASSIGNMENT
`30.
`This action arises in Santa Clara County where Defendant Apple is headquartered.
`Therefore, pursuant to Civil Local Rule 3-2(e), the appropriate divisional assignment is the San
`Jose Division.
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`A.
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`FACTUAL ALLEGATIONS
`Apple’s Anticompetitive Conduct
`31.
`In Spring 2007, Apple began a massive advertising campaign to market its new
`wireless communication device, the iPhone. The iPhone was advertised as a combined mobile
`phone, iPod and “breakthrough” Internet communications device with desktop-class email, an
`“industry first” “visual voicemail,” web browsing, maps and searching capability. The iPhone
`was, in effect, the world’s first mobile computer. The iPhone shifted the paradigm for
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`smartphones, and it changed the entire cell phone manufacturing industry.
`32.
`Having designed and manufactured a highly advanced and desirable new product,
`Apple profited handsomely from selling its revolutionary new handset. The iPhone debuted on
`June 29, 2007, and despite its hefty $499 or $599 price tag, consumers waited in line to get their
`hands on one.7
`33.
`Shortly after it introduced the iPhone, in September 2007, Apple introduced the
`iPod Touch. The prices for those devices ranged between $299 to $399. In March 2010, it
`introduced its first iPad, which sold at prices of $499 to $699. The prices for each of these devices
`varied depending on how many gigabytes of storage they included.
`34.
`2.2 billion iPhones have been sold worldwide since the product was introduced, as
`well as more than 350 million iPads and over 400 million iPod Touch devices.8 Apple has
`rightfully earned hundreds of billions of dollars in revenue from selling its iOS Devices.
`35.
`But Apple wanted more. It did not want to limit its revenues to what consumers
`were willing to pay for the iOS Devices themselves. Apple wanted a substantial piece of every
`dollar that consumers would ever pay to buy any kind of software for any iOS Device at any time
`anywhere in the world.
`36.
`To achieve that end, Apple embarked on a scheme to monopolize the aftermarket
`for iOS applications and to foreclose and protect itself against any and all competition it might
`face in the distribution of iOS applications. In contrast to the robust competition Apple faces in
`the software aftermarket for its desktop and laptop computers, Apple wanted the entire iOS Device
`software aftermarket for itself. Apple achieved its unlawful goal through a series of actions.
`
`
`7
`Apple has since released numerous models of iPhone, iPad and iPod, with prices for high-
`end models of iPhone and iPad Pro often ranging above $1,000, and iPod Touches currently
`ranging between $199 and $399.
`8
`See https://kommandotech.com/statistics/how-many-iphones-have-been-sold-worldwide/
`(last viewed November 9, 2021); https://www.statista.com/statistics/269915/global-apple-ipad-
`sales-since-q3-2010/ (last viewed November 9, 2021); https://www.businessinsider.com/rise-and-
`fall-apple-ipod-2020-1 (last viewed November 9, 2021).
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`37.
`Apple at all times retained exclusive control over the design, features and operating
`software for the iPhone, iPad and iPod Touch, known as iOS, which is based on the same
`technologies that are used in Apple’s desktop and laptop computers’ operating systems, known as
`OS X. Although Apple has always maintained OS X as an “open” system that allows iMac and
`MacBook consumers to run software manufactured or sold by any distributor, Apple modified its
`iOS version to be a “closed” system by installing “security measures” or “program locks”
`designed to prevent iPhone consumers from installing and running apps that were not sold or
`approved by Apple.
`38.
`Apple did not close the iOS system for the purpose of protecting its proprietary
`right to own, sell or license iOS. Apple closed the iOS system for the specific purpose, and with
`the specific intent, of foreclosing competition from other potential iPhone software manufacturers
`and distributors so that Apple could monopolize and derive monopoly profits from the iOS apps
`aftermarket.
`39.
`Apple’s CEO, Tim Cook, recently admitted that Apple tries to avoid competition
`from developers and other app stores: if other app stores were allowed to compete with its App
`Store, Apple would “have to differentiate [its App Store] in some way. I don’t know what we
`would do.”9
`40.
`After Apple launched its iPhone 2G in June 2007, Apple enhanced its iPhone-
`related revenues either by developing its own apps for ringtones, instant messaging, Internet
`access, gaming, entertainment, video and photography or by enabling “approved” third party
`manufacturers to develop iOS apps. Apple always conditioned its “approval” of such apps on the
`third party’s agreement to give Apple a share of the third party’s sales proceeds.
`41. However, because Apple’s OS X and iOS operating systems were based on the
`widely available Unix platform and included technologies and services that were based on other
`open software systems, Apple’s initial program locks designed to eliminate Third Party Apps
`
`
`9
`Epic Games, Inc. v. Apple Inc., No. 4:20-cv-05640-YGR (N.D. Cal. May 21, 2021), Trial
`Tr. at 3934:23-3935:2, ECF No. 758.
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`proved ineffective, as clever third party programmers quickly circumvented Apple’s security
`measures and made non-Apple approved iOS apps available for sale on the Internet.
`42. Almost immediately after the iPhone’s launch, unapproved Third Party Apps
`started to appear and threatened to compete with Apple in the iOS apps aftermarket. For example,
`Mobile Chat and FlickIM gave iPhone users access to instant messaging programs from which
`Apple derived no revenues. Apple responded to these threats by updating its iOS to eliminate
`iPhone consumers’ ability to use these Third Party Apps and by warning its iPhone customers that
`using Third Party Apps would nullify Apple’s iPhone warranty.
`43. Apple also faced threatened competition for iPhone ringtones. When a customer
`purchased a song for $1 from the Apple iTunes store, Apple charged the customer an additional 99
`cents to convert any portion of that song into a ringtone. A number of competing programmers
`promptly offered a variety of ringtone programs that enabled iPhone consumers to download both
`songs and ringtones for free. Some of these programs allowed customers to use samples of
`popular songs lawfully downloaded from Apple’s iTunes store as a ringtone. Other programs,
`such as I-Toner from Ambrosia Software and iPhone RingToneMaker from Efiko software,
`allowed customers to “clip” portions of songs purchased by them from iTunes for use as ringtones.
`44.
`Since many of these programs used songs downloaded from iTunes, Apple initially
`sought to block the use of those songs as ringtones by updating the iTunes software to install
`program locks that would interfere with such use. However, those efforts were all quickly
`defeated by third party programmers, sometimes within hours of the release of the update. So
`Apple again responded to these threats by updating its iOS to eliminate iPhone consumers’ ability
`to use these Third Party Apps and by voiding the warranties of iPhone customers who used them.
`45.
`Ultimately, Apple eliminated the threat of competition from unapproved apps
`developers by conceiving and implementing the App Store in order to become the exclusive
`distributor of iOS apps, and by thereafter rigorously enforcing and maintaining its monopoly.
`46.
`Apple laid the groundwork for its App Store in March 2008, when Apple released a
`“software development kit” (“SDK”) for the stated purpose of enabling independent software
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`developers to design applications for use on the iPhone and iPod Touch. For an annual fee of $99,
`the SDK allows developers to supply apps to Apple for distribution through Apple’s App Store.
`47.
`Apple opened its App Store in July 2008. Apple owns 100% of the App Store,
`maintains and operates the App Store with Apple employees or agents, and controls all of the App
`Store sales, revenue collections and other business operations.
`48.
`Apple informs its prospective apps developers (though not its iOS Device
`consumers) that the developers’ apps cannot be sold anywhere except in the App Store. Apple
`also informs its developers (but does not make clear to its iOS Devices customers ) that Apple will
`charge iOS Device consumers a 30% commission for any non-free app sold in the App Store.
`49.
`Apple changed its website, shortly after the United States Supreme Court ruled in
`Plaintiffs’ favor in Apple Inc. v. Pepper, 139 S. Ct. 1514 (2019), to disclose for a time that Apple
`“collects a 30% commission” on paid apps, subscription sales for the first year of the subscriptions
`(and 15% thereafter) and 30% on other in-app purchases.
`50.
`Consequently, the prices for apps available in Apple’s App Store include the
`developers’ price plus Apple’s 30% mark-up.10 When an iOS Device customer buys an app from
`Apple, it pays the full purchase price, including Apple’s 30% commission, directly to Apple.
`Apple takes its 30% commission off the top and then remits the balance, or 70% of the purchase
`price, to the developer. Apple sells the apps (or, more recently, licenses for the apps) directly to
`the customer, collects the entire purchase price, and pays the developers after the sale. The
`developers at no time directly sell the apps or licenses to iOS Devices customers or collect
`payments from the customers.
`51.
`On information and belief, throughout the Class Period, Apple threatened to
`terminate any developer that made its apps available on its own website or through a distributor
`other than Apple, and Apple continued to discourage iOS Devices customers from downloading
`
`
`10
`As discussed supra, in the case of apps and created by developers who qualify for the
`recently-created Small Business Program, Apple collects a 15% commission.
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`Third Party Apps by telling customers that Apple would void and refuse to honor the iOS Devices
`warranties of any customer who downloaded a Third Party App.
`52.
`In addition to the sales of applications themselves, Apple’s contracts with its
`developers provide for Apple to obtain a 30% commission for almost every type of in-app
`purchase.11 Subscriptions are recurring purchases that allow consumers to obtain access to content
`for a period of time, and many subscriptions renew automatically unless the consumer proactively
`terminates them.
`53.
`Apple also requires developers to select prices for their apps that end in “99 cents,”
`meaning that developers are required to increase prices in one-dollar increments ($0.99, $1.99,
`$2.99, and so forth). As a practical matter, that allows only for very blunt price adjustments
`because “[t]he vast majority of [paid] apps are priced at 99 cents.”12 Thus, a developer wishing to
`set a price lower than the Apple-mandated minimum price point must give away the app for free;
`one wishing to price above that point must at least double the $0.99 price.
`54.
`By designing iOS as a closed system, installing security measures and program
`locks to prevent Third Party App downloads, establishing the App Store as the exclusive
`worldwide distributor of iOS apps, enforcing the App Store’s exclusive distributor status by
`terminating apps developers who sold apps in competition with Apple, voiding the warranties of
`iOS Devices consumers who bought competing apps, and denying authorization of apps with in-
`app purchasing features that do not meet Apple’s payment requirements, Apple has since June
`2007 willfully acquired and maintained a monopoly in the iOS apps aftermarket and has
`positioned itself as the one and only distributor of iOS apps on the entire planet. Apple has no
`competition in the multi-billion dollar iOS apps aftermarket, domestically or abroad, whatsoever.
`
`
`11
`As set forth supra, subscriptions after the first year are subject to Apple’s 15%
`commission.
`Innovation Gazette,
`for Your App, Digital
`12
`Tim Kridel, Pricing Strategies
`https://www.digitalinnovationgazette.com/dollars-and-distribution/pricing-strategies-for-your-
`app/index.php (last viewed November 10, 2021).
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`55.
`Prior to Plaintiffs’ purchases of their iOS Devices, Apple had not even disclosed –
`much less obtained the Plaintiffs’ contractual consent to – either (a) Apple’s monopolization of
`and collection of monopoly profits from the iOS applications aftermarket, or (b) having their iOS
`Devices locked to prohibit Plaintiffs from using any app that was not approved or sold by Apple.
`Absent obtaining Plaintiffs’ contractual consent, Apple’s monopolization of the iOS applications
`aftermarket constitutes an antitrust violation under Section 2 of the Sherman Act.
`B.
`Plaintiffs’ Injuries
`56.
`Plaintiffs have been injured by Apple’s anticompetitive conduct because they paid
`more for their iOS apps than they would have paid in a competitive market. Plaintiffs have also
`been injured because Apple’s unlawful monopolization of the iOS apps aftermarket has
`extinguished Plaintiffs’ freedom of choosing between Apple’s App Store and lower cost market
`alternatives that would have been available had Apple not monopolized the market. Plaintiffs
`have also been injured because Apple’s establishment and maintenance of monopoly pricing has
`caused a reduction in the output and supply of iOS apps, which would have been more abundantly
`available in a competi