`
`
`
`Steve W. Berman (pro hac vice)
`Robert F. Lopez (pro hac vice)
`HAGENS BERMAN SOBOL SHAPIRO LLP
`1301 Second Avenue
`Suite 2000
`Seattle, WA 98101
`Telephone: (206) 623-7292
`Facsimile: (206) 623-0594
`steve@hbsslaw.com
`robl@hbsslaw.com
`
`Shana E. Scarlett (SBN 217895)
`HAGENS BERMAN SOBOL SHAPIRO LLP
`715 Hearst Avenue
`Suite 202
`Berkeley, CA 94710
`Telephone: (510) 725-3000
`Facsimile: (510) 725-3001
`shanas@hbsslaw.com
`
`Attorneys for Plaintiffs Donald R. Cameron,
`Pure Sweat Basketball, Inc., and the Proposed
`Classes
`
`[Additional counsel on signature page]
`
`
`Guido Saveri (22349)
`R. Alexander Saveri (173102)
`Cadio Zirpoli (179108)
`SAVERI & SAVERI, INC.
`706 Sansome Street, #200
`San Francisco, CA 94111
`Telephone: (415) 217-6810
`Facsimile: (415) 217-6813
`guido@saveri.com
`rick@saveri.com
`cadio@saveri.com
`
`Kimberly A. Justice (pro hac vice)
`Jonathan M. Jagher (pro hac vice)
`FREED KANNER LONDON & MILLEN LLC
`923 Fayette Street
`Conshohocken, PA 19428
`Telephone: (610) 234-6487
`Facsimile: (224) 632-4521
`kjustice@fklmlaw.com
`jjagher@fklmlaw.com
`
`Attorneys for Plaintiff Barry Sermons and the
`Proposed Classes
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`OAKLAND DIVISION
`
`DONALD R. CAMERON, a California resident;
` No. 4:19-cv-03074-YGR
`PURE SWEAT BASKETBALL, INC., an Illinois
`
`corporation; and BARRY SERMONS, a Georgia
`PLAINTIFFS’ CONSOLIDATED
`resident, on behalf of themselves and all others
`CLASS ACTION COMPLAINT
`similarly situated,
`FOR VIOLATIONS OF THE SHERMAN
`
`ACT AND CALIFORNIA UNFAIR
`
`COMPETITION LAW
`
`
`
`Hon. Yvonne Gonzalez Rogers
`
`
`JURY TRIAL DEMANDED
`APPLE INC., a California corporation,
`
`
`
`
`
`
`
`Plaintiffs,
`
`v.
`
`Defendant.
`
`
`
`
`
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`
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`TABLE OF CONTENTS
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`
`
`I.
`II.
`III.
`IV.
`
`V.
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`Page
`INTRODUCTION ................................................................................................................... 1
`JURISDICTION ...................................................................................................................... 4
`VENUE .................................................................................................................................... 5
`PARTIES ................................................................................................................................. 5
`A.
`The Plaintiffs ............................................................................................................... 5
`B.
`The Defendant ............................................................................................................. 8
`RELEVANT FACTS ............................................................................................................... 8
`A.
`iOS developers distribute apps via Apple’s App Store. .............................................. 9
`B.
`Apple is a monopolist in the U.S. market for iOS app and in-app-
`product distribution services. ..................................................................................... 15
`Alternatively, Apple is an attempted monopolist in the U.S. market
`for iOS app and in-app-product distribution services. ............................................... 18
`Alternatively, Apple behaves as a monopsonist retailer, or
`attempted monopsonist retailer, of iOS apps and related digital
`products. .................................................................................................................... 18
`By Apple’s design, no one, including Google, provides market
`constraints. ................................................................................................................. 19
`Apple’s practices with respect to the App Store further restrain and
`injure competition in the U.S. market for iOS app and in-app-
`product distribution services, where already there are high barriers
`to entry. ...................................................................................................................... 20
`Apple’s unlawful practices harm competition, developers, and
`consumers of apps and in-app products, too. ............................................................ 21
`Apple harms consumers and competition by depressing
`1.
`output. ............................................................................................................ 22
`Apple’s behavior stifles innovation. .............................................................. 22
`Apple harms developers by denying them the opportunity
`to choose other means to get paid for their work. ......................................... 26
`Apple harms consumers of its distribution services by way
`of supra-competitive pricing and other pricing mandates. ............................ 26
`By requiring that only it can distribute iOS apps via the App Store,
`Apple depresses output by burying apps (and therefore in-app
`products) among the millions available for sale there. .............................................. 31
`PLAINTIFFS’ CONSOLIDATED COMPLAINT - i
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`010818-11 1195706 V1
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`C.
`
`D.
`
`E.
`
`F.
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`G.
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`2.
`3.
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`4.
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`H.
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`
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`Case 4:19-cv-03074-YGR Document 53 Filed 09/30/19 Page 3 of 139
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`
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`I.
`
`Apple has admitted that iOS developers have antitrust standing to
`bring this suit. ............................................................................................................ 32
`INTERSTATE TRADE AND COMMERCE ....................................................................... 34
`VI.
`VII. RELEVANT MARKET ........................................................................................................ 34
`VIII. CLASS ALLEGATIONS ...................................................................................................... 35
`IX.
`APPLICABILITY OF CALIFORNIA LAW ........................................................................ 38
`X.
`CLAIMS FOR RELIEF ......................................................................................................... 39
`FIRST CAUSE OF ACTION VIOLATION OF THE SHERMAN ACT –
`MONOPOLIZATION/MONOPSONIZATION (15 U.S.C. § 2) .......................................... 39
`SECOND CAUSE OF ACTION VIOLATION OF THE SHERMAN ACT –
`ATTEMPTED MONOPOLIZATION/MONOPSONIZATION (15 U.S.C.
`§ 2) ......................................................................................................................................... 41
`THIRD CAUSE OF ACTION VIOLATION OF THE UNFAIR COMPETITION
`ACT (CAL. BUS. & PROF. CODE §§ 17200 ET SEQ.) ...................................................... 43
`PRAYER FOR RELIEF .................................................................................................................... 46
`JURY TRIAL DEMANDED ............................................................................................................ 47
`
`
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`For their complaint against defendant Apple Inc. (Apple), plaintiffs, on their own behalf and
`on behalf of all others similarly situated, allege as follows:
`I.
`INTRODUCTION
`Plaintiffs Donald R. Cameron, Pure Sweat Basketball, Inc. (Pure Sweat Basketball),
`1.
`and Barry Sermons are developers of digital products for the iPhone, a device powered by Apple’s
`iOS operating system. iOS developers create the applications and in-app products that bring Apple
`iPhones, iPads, and iPod touch music players to life. Their apps allow users to play games while on
`line at the grocery store, to edit documents, to make exercise more fun, to help meditate, and so
`much more.
`Apple’s abusive monopoly in iOS app/in-app distribution services
`2.
`Plaintiffs and their fellow iOS developers sell their iOS apps or app-related digital
`products via Apple’s App Store. They have no choice in the matter, but not because Apple built an
`app store that beat all comers fair and square. Instead, from the outset, Apple attained monopoly
`power in the U.S. market for iOS app and in-app-product1 distribution services2 by slamming the
`door shut on any and all potential competitors. And it has barred the door ever since. On the
`thinnest of pretenses—that somehow it is uniquely qualified to ensure the safety and device-
`compatibility of apps3—Apple has never permitted anyone else to distribute apps and related digital
`products4 to the many millions of U.S. owners of its mobile devices.
`
`
`1 Throughout this complaint in reference to the App Store, the terms “in-app product(s),” “in-
`app-product(s),” and “in-app purchase(s)” include subscriptions, though at times plaintiffs discuss
`other constituent products for clarity or information purposes. In-app products might include, for
`example, paid virtual implements that a consumer buys in a game that is nominally free.
`Subscriptions might include changing or updated digital content delivered through an app for a
`periodic fee. Here, such products can be sold via the Apple Store, and if they are, then Apple
`collects a fee or commission as alleged herein. (See, e.g. n. 6, infra (referring to Apple explanations
`on its website).)
`2 Alternatively, as alleged herein, Apple is a de facto monopsonist given its status as the sole
`retailer of the app developers’ digital products.
`3 See, e.g., “Submitting iOS apps to the App Store,” available at:
`https://developer.apple.com/ios/submit/ (“The App Store is designed to provide customers with apps
`that work seamlessly with their device’s capabilities.”) (last accessed Sept. 30, 2019); Brief of
`Petitioner Apple Inc., submitted to the U.S. Supreme Court in Apple Inc. v. Pepper, Aug. 10, 2018,
`Sup. Ct. No. 17-204 (Apple Sup. Ct. Pet. Br.), at 7 (“Apple designed, from the ground up, an
`ecosystem for the use, development, sale, and distribution of apps. That ecosystem has two relevant
`features: (1) iPhones will only download third party software that Apple has reviewed for malware
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`Further, Apple’s market power has allowed it to charge developers a supra-
`3.
`competitive 30% commission5 on the sale of paid apps and in-app products6 for over 11 years now,
`despite the inevitable accrual of experience and economies of scale. Additionally, Apple collects a
`$99 annual fee from all developers who wish (and must) sell their products through the App Store.
`Apple also dictates minimum and greater price points, such that iOS developers cannot offer paid
`products at less than $.99 or at price points ending in anything other than $.99. And so, while Apple
`is fond of pointing to impressive-sounding sales numbers and dollars earned by developers,
`nonetheless, its exorbitant fee for distribution (or retail sales) services, coupled with its $99 annual
`fee and pricing mandates, have cut unlawfully into what would have been developers’ earnings in a
`competitive atmosphere.
`4.
`Also, Apple’s overly expensive 30% commission, its $99 annual developer fee, and
`its pricing mandates have depressed output of paid app and in-app-product transactions. The
`consumer apps marketplace, which gives rise to the sale of Apple’s distribution or retail-sales
`services to iOS developers, resoundingly favors low-priced or free apps.7 Developers and would-be
`developers, who can only earn 70% on the dollar on each paid app or product, and who must pay $99
`annually to sell in the App Store, undoubtedly think very hard about whether to spend the effort,
`time, and energy that is required to design and program an app or related product; bring it to market
`in the single store available; and endeavor to recoup costs and make a reasonable profit. For many,
`the calculus, including financial investments, makes no economic sense. And so they do not
`
`
`and offensive content, among other things, and (2) to distribute those third party apps, Apple created
`a new kind of software distribution platform, the App Store.”).
`4 Those few who have tried have had to use unsanctioned workarounds, some of which required
`the owners to jailbreak their devices and lose warranty coverage and support in the process. (See,
`e.g., “Cydia closes purchases for its iOS jailbreak store,” The Verge, Dec. 16, 2018, available at:
`https://www.theverge.com/2018/12/16/18143422/cydia-disables-in-app-purchases-ios-jailbreak-
`store-apple-iphone (last accessed Sept. 30, 2019).)
`5 Plaintiffs alternatively refer to Apple’s commission as a “transaction fee,” “distribution fee,”
`“distribution-services fee,” or “fee.”
`6 The current exception is subscriptions, where the rate drops to 15% after a year. (E.g., “App
`Store—Overview,” available at: https://www.apple.com/ios/app-store/principles-practices/ (last
`accessed Sept. 30, 2019).)
`7 See n.60, infra.
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`proceed. This state of affairs, which is ongoing, leads to less output in sales, and ergo, distribution
`transactions.
`But for those who nonetheless soldier on towards offering paid products to Apple
`5.
`device owners, they face yet another output-depressing scenario: discoverability. The sheer number
`of apps in the App Store, together with the number of new weekly entrants,8 means that most apps
`and in-app products will never be seen by consumers. Because there are so many apps available in
`the one iOS App Store that exists, due to Apple’s usurpation of the entire marketplace, huge numbers
`of apps necessarily get lost. Apps buried among the 2 million+ available apps9 do not sell because
`no one finds them, leading to less distribution transactions for apps and in-app products. If Apple
`did not shut out all competition from access to iOS device owners, there would be more stores that
`could feature more apps, as well as stores that would specialize in certain kinds of apps. Also,
`competitors would find new ways, including by way of leveraging existing technology or inventing
`other and better means, to bring more apps to the attention of iOS device owners. Additionally, such
`competitors would motivate Apple to make its own App Store more usable and functional, where
`currently it has no such incentive from competitors. In other words, competition would bring more
`and better means to pair users with the applications they are looking for, need, or want. Thus,
`competition would boost output in distribution and retail transactions. In short, the only solution for
`the current output-depressing condition wrought by Apple is to allow other providers of distribution
`(and retail) services to compete.
`Alternatively: Apple’s abusive monopsony in iOS app/in-app product retailing
`6.
`There is another way to view Apple’s acquisition and abuse of anti-competitive
`market power. Alternatively, by way of the same anti-competitive conduct described above, Apple
`
`8 According to a piece recently published by Apple at its website, it reviews an astounding
`“100k” apps weekly. (“App Store—Overview,” available at: https://www.apple.com/ios/app-
`store/principles-practices/ (last accessed Sept. 30, 2019).) It says that of these, it approves 60% and
`rejects 40%, and it rejects the 40% mostly for “minor bugs, followed by privacy concerns.” (Id.) It
`also currently provides an avenue for appeal of sorts to those whose apps are rejected. (Id.) No
`doubt these processes lead to large numbers of new entrants into the App Store every week, which
`further exacerbates the already serious discoverability problem.
`9 Apple told the U.S. Supreme Court in August 2018 that as of then, “there [we]re over 2 million
`apps offered through the App Store.” (Apple Sup. Ct. Pet. Br. at 9 (emphasis deleted).) It would
`appear that there are many more today. (See, e.g., n.8, supra.)
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`has improperly attained and exercised monopsony power—i.e., buy-side monopoly power10—as the
`sole retailer of iOS apps and in-app products. It uses this immense power to force iOS developers to
`take 70% on the dollar for their paid products by way of subtracting its supra-competitive 30%
`commission.11 This practice is analogous to a monopsonist retailer paying artificially low wholesale
`prices to its suppliers. In both paradigms, a competitive market would yield better post-commission
`or wholesale prices for, and fairer profit on, developers’ digital products. It also would mean higher,
`and fairer, profits for developers as Apple’s $.99 and end-in-$.99 pricing mandates were
`extinguished by competitive forces, such that developers could price at lower and different price
`points in order to maximize volumes.
`7.
`Plaintiffs, on their own behalf and that of similarly situated developers, seek monetary
`recovery and injunctive relief for harm caused by Apple’s violations of federal antitrust law and
`California’s Unfair Competition Law—harm that persists and will never abate unless Apple is called
`to account for its anti-competitive behavior.
`II.
`JURISDICTION
`This Court has subject matter jurisdiction over this matter pursuant to the Class
`8.
`Action Fairness Act of 2005, 28 U.S.C. § 1332(d), because the proposed classes consist of 100 or
`more members; the amount in controversy exceeds $5,000,000, exclusive of costs and interest; and,
`given the vast number of iOS developers as alleged herein, it is believed, and therefore alleged, that
`at least one member of the class of plaintiffs (for example, plaintiff Pure Sweat Basketball, or
`plaintiff Sermons) is a citizen of a state different from the defendant, which is a California
`corporation.
`
`
`10 As the Supreme Court has put it:
`Monopsony power is market power on the buy side of the market. Blair & Harrison,
`Antitrust Policy and Monopsony, 76 Cornell L. Rev. 297 (1991). As such, a
`monopsony is to the buy side of the market what a monopoly is to the sell side and is
`sometimes colloquially called a ‘buyer's monopoly.’ See id., at 301, 320; Piraino, A
`Proposed Antitrust Approach to Buyers’ Competitive Conduct, 56 Hastings L.J. 1121,
`1125 (2005).”
`Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., Inc., 549 U.S. 312, 320 (2007).
`11 Again, the current exception is long-term subscriptions, after the first year. (See n.6, supra.)
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`Furthermore, this Court has federal question jurisdiction pursuant to the federal
`9.
`antitrust law invoked herein, including the Sherman Act and Clayton Antitrust Act. E.g., 28 U.S.C.
`§ 1331, 28 U.S.C. § 1337(a), and 15 U.S.C. § 15(a).
`III. VENUE
`Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391 because a
`10.
`substantial part of the events or omissions giving rise to plaintiffs’ claims occurred in this judicial
`district.
`There also is a venue provision specifying this judicial district in the operative
`11.
`contract with iOS developers.12
`12.
`Furthermore, Apple’s principal place of business is in this judicial district, and it is
`believed, and therefore alleged, that a substantial amount of the conduct of which plaintiffs complain
`occurred here. For example, Phil Schiller, Apple’s Senior Vice President, Worldwide Marketing,
`who heads the App Store,13 has his office at Apple’s headquarters in Cupertino, California.14
`Therefore, decisions regarding the App Store and those giving rise to plaintiffs’ claims were made at,
`and emanate from, that California location. Also, Apple has marketed, advertised, and sold affected
`devices within this judicial district.
`
`IV.
`
`PARTIES
`
`A.
`
`The Plaintiffs
`Donald R. Cameron
`13.
`Plaintiff Cameron is a California resident. He co-developed a baby-naming app, Lil’
`Baby Names, which he has made available for sale in the App Store since July 2015. Mr. Cameron
`
`
`12 See Ex. A (exemplar of Apple Developer Agreement), ¶ 17.
`13 See, e.g., “Apple's Phil Schiller is now in charge of the App Store,” The Verge, Dec. 1, 2015,
`available at: https://www.theverge.com/2015/12/17/10412204/apple-phil-schiller-now-leads-app-
`store (last accessed Sept. 30, 2019).
`14 E.g., “Apple to host annual Worldwide Developers Conference June 3-7 in San Jose,” Mar. 14,
`2019, available at: https://www.apple.com/newsroom/2019/03/apple-to-host-annual-worldwide-
`developers-conference-june-3-7-in-san-jose/ (quoting Mr. Schiller, and listing Cupertino, CA, at the
`top of the release) (last accessed Sept. 30, 2019); “Contacting Apple,”
`https://www.apple.com/contact/ (listing Apple’s corporate address as One Apple Park Way
`Cupertino, CA 95014) (last accessed Sept. 30, 2019).
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`is a party to the developer contracts with Apple referenced herein. These contracts specify the
`commission rate and pricing and other mandates at issue in this suit. Also, in order to be permitted
`to make his app available for sale in the App Store, Mr. Cameron has paid Apple’s mandatory $99
`annual developer fee since July 2015, with the last such payment made in December 2018. Based on
`a review of his records, Mr. Cameron’s last sale of his app was in or about April 2019. Because Mr.
`Cameron’s product is a paid app, he has paid Apple’s 30% commission on each sale.
`14. Mr. Cameron’s app was developed in the Swift programming language for the iOS
`ecosystem.
`Additionally, Mr. Cameron’s app has always been subject to Apple’s requirement that
`15.
`paid apps be priced at a minimum of $.99 as well as its end-in-$.99 pricing mandate. Throughout its
`availability in the App Store, Mr. Cameron has priced his app at $2.99. If, however, Mr. Cameron
`could have priced his app at above zero but below $.99, he would have tried or settled on such
`pricing, in order to attempt to capture volume sales. Of course, Mr. Cameron still would have faced
`the grave discoverability problem faced by all iOS app developers. With so many apps crammed
`into the sole iOS app store, consumers cannot find good apps. In fact, a search for “baby naming” in
`the app store yields pages and pages of such apps—but not Mr. Cameron’s (at least before a typical,
`reasonable consumer would stop scrolling).15 That search reveals apps to help with Sikh baby
`naming, Icelandic baby naming, and Albanian baby naming, among so many others, but not Mr.
`Cameron’s app.
`16.
`In order to reach consumers of iOS devices, Mr. Cameron and the other plaintiffs
`required iOS distribution services (and not Android OS or other OS distribution services). Because
`Apple excluded all competition for iOS distribution services, Mr. Cameron, like his fellow plaintiffs,
`
`
`15 Apple’s recent efforts to revamp the look of the App Store, and to feature more apps, is not,
`and will never be, enough, when there are only 365 days in the year, only so much space on screens,
`and so very many apps of all sorts crowded into a single store. (See, e.g., “App Store discovery is
`climbing after the iOS 11 redesign,” Business Insider, May 16, 2018, available at:
`https://www.businessinsider.com/apple-redesign-boosting-app-store-discovery-2018-5 (discussing
`effect of September 2017 design change that allows more apps to be featured, which was quite
`limited, especially when compared to the total number of apps in the App Store, and also considering
`that most apps are found by search—which again will yield way too many results to prove fruitful to
`vast numbers of developers) (last accessed Sept. 30, 2019).)
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`had no choice but to pay what Apple demanded for its iOS distribution services, i.e., its supra-
`competitive 30% commission on all sales of his paid app.
`17.
`Alternatively, Apple paid Mr. Cameron what amounts to an artificially low wholesale
`price for apps sold via the App Store.
`Pure Sweat Basketball
`18.
`Plaintiff Pure Sweat Basketball is an Illinois corporation with its principal place of
`business in Crystal Lake, Illinois. It is the developer of the Pure Sweat Basketball Workout App.
`Pure Sweat Basketball is a party to the developer contracts referenced in this complaint. These
`agreements specify the commission rate and pricing and other mandates described herein. Also, in
`order to be permitted to make its app available in the App Store, and to sell non-zero priced
`subscriptions through its app, Pure Sweat Basketball has paid Apple’s mandatory $99 annual
`developer fee. Pure Sweat Basketball’s last distributions of its app through the App Store, and sales
`of subscriptions at non-zero prices through the app, occurred in September 2019. Pure Sweat
`Basketball charges $4.99 monthly for its digital subscription product, or $49.99 annually, and it has
`paid Apple’s supra-competitive 30% commission on each sale.
`19.
`Alternatively, Apple paid Pure Sweat Basketball what amounts to an artificially low
`wholesale price for digital products sold via the App Store.
`20.
`Furthermore, Pure Sweat Basketball’s in-app subscription sales (like the app, if sold at
`above-zero prices) have always been subject to Apple’s requirement that app transactions be priced
`at a minimum of $.99, as well as its end-in-$.99 pricing mandate. Pure Sweat Basketball would try
`price points that end in sums other than $.99, as well sales of digital products at price points below
`$.99, in efforts to achieve maximum sales, if Apple allowed it to do so.
`Barry Sermons
`21.
`Plaintiff Sermons is a Georgia resident. Since the opening of the App Store, Mr.
`Sermons has developed numerous apps that were sold through the App Store for a non-zero price,
`including the following: Morigo; Unity North Atlanta; Mielle Organics; dmvfta; Bovanti;
`sportsandspine; Revolver Podcast; and The Film Black Friday. Mr. Sermons executed a developer
`contract with Apple in order to place apps in the App Store for purchase by consumers. This
`PLAINTIFFS’ CONSOLIDATED COMPLAINT - 7
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`contract specifies the commission rate (30%), annual developer fee ($99), price requirements (a
`minimum of $.99 and all pricing ending in $.99), and other mandates at issue in this suit. Mr.
`Sermons was injured in fact and has lost money or property as a result of Apple’s unlawful and
`anticompetitive conduct.
`B.
`The Defendant
`22.
`Apple, the designer, manufacturer, and vendor of iPhones, iPads, and iPod touch
`music players; the designer and author of iOS and iOS updates; and the owner and operator of the
`App Store, is a California corporation. It maintains its headquarters and principal place of business
`in Cupertino, California.
`23.
`Also upon information and belief, and as alleged above, Apple took all decisions and
`actions complained of herein at or near its corporate headquarters in Cupertino, California, or
`elsewhere in the state of California. It is believed, and therefore alleged, that substantially all of the
`misconduct alleged in this complaint occurred in or emanated from California.16
`V.
`RELEVANT FACTS
`Apple has injured plaintiffs and competition by way of its unlawful behavior in the
`24.
`U.S. market for iOS app and in-app product (IAP) distribution or retailing services. As the holder of
`an improperly obtained monopoly in this market (or, effectively, as a monopsonist in the retailing of
`apps and in-app products), Apple’s behavior has resulted in overcharges in these transactions due to
`its imposition of a supra-competitive and profit-reducing 30% fee on each paid sale from its store.17
`Alternatively, as a retail monopsonist that obtained its power by improper means, Apple has
`underpaid plaintiffs for their digital products. Such conduct has been wildly profitable for Apple—
`while its hardware sales may vary or even decline at times, analysts have predicted that its App Store
`revenues will increase.18
`
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`16 See, e.g., nn.13-14, supra.
`17 Again, the rate for subscriptions now drops to 15% after one year. (E.g., “App Store—
`Overview,” available at: https://www.apple.com/ios/app-store/principles-practices/ (last accessed
`Sept. 30, 2019).)
`18 See, e.g., “The 30 Percent App Fees Are Too Damn High,” Bloomberg Businessweek, available
`at: https://www.bloomberg.com/news/articles/2019-01-07/the-30-percent-fees-app-developers-have-
`to-pay-are-too-damn-high (“Apple skipped its typical disclosure of full-year App Store purchases
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`Apple’s minimum and end-in-$.99 pricing mandates for paid apps and in-app
`25.
`products also depress output. Further, Apple’s aggressive and improper monopolization of this
`market, or the improper acquisition and abuse of its monopsony powers in the retailing space, has
`stifled competition by preventing the emergence of any viable competitors whatsoever, which
`reinforces and strengthens its pernicious and overbearing power in a market already distinguished by
`high barriers to entry. Additionally, its exclusion of any competitors depresses the output of iOS app
`and in-app-product distribution transactions by rendering undiscoverable vast numbers of apps (and
`related in-app products) due to the sheer number of apps available in the one iOS app store.
`A.
`iOS developers distribute apps via Apple’s App Store.
`Inception of the App Store
`26.
`Apple introduced the App Store in July 2008, about a year after it introduced the
`iPhone.19 This followed its introduction in May 2008 of a software development kit for third-party
`app developers.20
`iOS app and in-app product distribution/retail sales
`27.
`Americans own some 189 million iPhones,21 all of which run iOS apps and in-app
`products.22 And they own tens of millions more iPads and iPod touch devices, 23 which also run iOS
`
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`and developer payouts for 2018, but analysts estimate revenue has risen steadily. At the same time,
`growth of its iPhone income stream has become unreliable.”) (last accessed Sept. 30, 2019).
`19 Apple Sup. Ct. Br. at 7.
`20 Id.
`21 “189 Million iPhones Are Currently in Use in the U.S.,” Cult of Mac, Feb. 7, 2019, avail