COVID-19 Tracking App Developer Sues Apple a 2nd Time, Claims Antitrust Violations

Coronavirus Reporter, a Wyoming-based corporation with an app of the same name, alleges Apple “prevented a world-renowned scientist from competing with their own COVID app,” said its 233-page complaint alleging violations of the Sherman Act. Co-plaintiff Calid Inc. conducted a “modest amount” of business in the App Store, but the company abandoned work on its platform due to “inefficiencies,” such as Apple’s 30% App Store transaction fee, it said.

The 2021 action (docket 3:21-cv-05567), filed by Coronavirus Reporter, Calid and Jeffrey Isaacs, was dismissed in California federal court by U.S. District Judge for Northern California Edward Chen on Nov. 30 of that year. Chen granted Apple’s motion to dismiss all claims against it for antitrust and Racketeer Influenced and Corrupt Organizations Act violations, breach of contract and fraud. Keith Mathews of American Wealth Protection, Manchester, New Hampshire, is listed as a pro hac vice attorney in both cases.

In the Tuesday complaint, plaintiffs said the Coronavirus Reporter iOS app, written in February 2020, “attempted to use the national internet backbone for the first time in the history of pandemics to allow citizens to self-report and geolocate emerging epidemiological trends.” Apple’s “censorship mechanism” ties app distribution to the iPhone, using a digital “notary stamp” to mark each piece of software approved in the App Store, it said.

Apple “improperly blocked” an app developed by Robert Roberts, Coronavirus Reporter’s chief medical officer, in February 2020 to develop its own, said the complaint. The tech company blocked “the entire class of independent COVID apps,” including those with “institutional affiliation,” it said.

The App Store handles over 80% of smartphone software sales and distribution “as measured by profit,” alleged the complaint. Plaintiffs could offer software distribution websites that compete as an app distribution service “but for [Apple’s] Notary Stamp requirements,” it said.

Apple holds monopoly power in the market for developer access to the smartphone userbase, said the complaint. An app developer can’t access the iPhone userbase without Apple’s permission and can’t reasonably substitute another one, such as Android, because it would “forego 80% of profits, or 65% of users,” the complaint alleged. For a public health app such as Coronavirus Reporter, “this would defeat the functionality of the app by skewing statistics and omitting over half the population,” it said.

Apple’s conduct under its Developer Program License Agreement, which determines which apps will be published in the App Store, has “substantial anti-competitive effects,” including “disallowing any startup from assisting in the pandemic relief, via an app,” the complaint said. Plaintiffs Coronavirus Reporter and Calid, and other startups wishing to help, “were barred from doing so, because of Apple’s illegal contracts,” it said.

Plaintiffs seek a permanent injunction enjoining Apple from several technological practices that “further anticompetitive restraints” on the relevant market, including executing code “that, when a user requests to launch an app, checks for the presence of Apple’s digital signature, and disables launch if such a signature is nonexistent” [the notary stamp requirement]. The requested injunction would also stop Apple from executing code preventing a user from downloading, transferring, or otherwise receiving and installing an application from sources other than the App Store, said the complaint.

Plaintiffs also seek treble damages compensating class members “in the billions.” Coronavirus Reporter Corp. suffered losses of at least $600 million “in goodwill, sponsorships, costs and charges for its version 1.0 through 3.0 apps,” it said. Calid suffered losses of over $12 billion when its WebCaller app, submitted on behalf of a developer, was “completely Sherlocked by Apple to create FaceTime 15,” it said.