Bakay v. Apple Inc.
- Richard Seeborg
- 3:24-cv-00476
- U.S. District Court · Northern District of California
- 14
In Bakay v. Apple, Judge Seeborg granted Apple’s dismissal motion because plaintiffs lacked antitrust standing, allowing them to amend.
The ruling affected Luisa Bakay, Elisa Jones, and Leticia Shaw’s proposed antitrust class action against Apple Inc. The motion to dismiss was granted, but the plaintiffs were allowed to amend within 30 days.
What happened
In Bakay v. Apple Inc., iPhone purchasers sued Apple in a proposed class action, alleging that Apple’s requirement that iOS browsers use its WebKit engine restricted competition and led to higher iPhone prices.
Apple asked the court to dismiss, arguing that the plaintiffs lacked constitutional and antitrust standing, had not adequately pleaded Sherman Act violations, and filed their claims too late. The court concluded that the alleged connection between Apple’s browser-engine requirement and the plaintiffs’ claimed overcharges was too uncertain and indirect, and that the alleged injury occurred in a different market from the alleged restraint.
Judge Richard Seeborg granted Apple’s motion to dismiss because the plaintiffs lacked antitrust standing for all claims and constitutional standing for requested injunctions. The court did not decide whether the Sherman Act claims were otherwise sufficient or whether they were timely, and granted leave to amend within 30 days.
The detailed version
- Bakay v. Apple Inc. · No. 3:24-cv-00476
- Richard Seeborg
- July 11, 2024
Background
Luisa Bakay, Elisa Jones, and Leticia Shaw brought a proposed class action against Apple Inc. They alleged that Apple used agreements with browser and browser-engine developers, including a purported agreement with Google, to require browsers on iPhones to use Apple’s WebKit browser engine. According to the plaintiffs, this limited the development of cross-platform progressive web apps, prevented additional smartphone operating-system competitors from entering the market, reduced competition, and caused plaintiffs to pay higher-than-competitive prices for iPhones.
The complaint asserted claims under Sections 1 and 2 of the Sherman Act. The plaintiffs characterized Apple’s alleged agreement with Google as an unlawful restraint and alleged that Apple and Google conspired to monopolize the smartphone operating-system market.
Apple’s Arguments and the Court’s Analysis
Apple moved to dismiss on four grounds: the plaintiffs lacked Article III standing and antitrust standing; they failed to plead violations of Sections 1 and 2 of the Sherman Act; and the claims were time-barred.
The court held that the plaintiffs had not shown antitrust injury. First, the alleged causal chain was too indirect and speculative. The plaintiffs’ theory required browsers using non-WebKit engines to emerge, developers to create a critical mass of progressive web apps, consumers to adopt those apps, new operating-system and smartphone competitors to enter at scale, and those competitors to pressure Apple to lower iPhone prices. The court found that the complaint did not plausibly explain how these independent third parties would take those steps. It also identified browser, progressive-web-app, and third-party operating-system developers as potential victims more directly harmed by the alleged conduct.
Second, the court found that the plaintiffs’ alleged injury occurred in the smartphone market, while the alleged restraint concerned competition in the U.S. mobile-browser market and the development and distribution of progressive web apps. That difference between the market allegedly restrained and the market where plaintiffs claimed injury weighed against antitrust standing.
The court also held that the plaintiffs lacked Article III standing to seek an injunction. Even if an injunction allowed additional browsers to operate on iOS, the requested relief depended on operating-system developers and smartphone manufacturers independently creating competing products at scale. The court found that result too speculative to establish that an injunction would likely redress the alleged injury.
Because the court found no antitrust injury for standing purposes, it did not decide whether the plaintiffs otherwise pleaded viable claims under Sections 1 or 2 of the Sherman Act. It also did not address whether the claims were time-barred.
Disposition
The court granted Apple’s motion to dismiss on the basis that the plaintiffs lacked antitrust standing for all claims and Article III standing for injunctive relief. The court granted the plaintiffs leave to amend within 30 days of the order. The order was entered by Richard Seeborg, Chief United States District Judge.
Read the full 14-page opinion on CourtListener, the free public archive maintained by the Free Law Project.