618Media Dijital Hizmetler Limited Sirketi v. Apple Inc.

Background

618Media brought the action after Apple terminated its Apple Developer Program account. The account allowed 618Media to distribute and market apps through the Apple App Store and to use Apple’s developer tools and related resources. The account was governed by the Apple Developer Program License Agreement and the Apple Developer Agreement.

The agreements stated that Apple could suspend, remove, disable, or terminate access to Apple services, including in Apple’s sole discretion and in some provisions without notice or liability. They also addressed suspected fraudulent, improper, unlawful, or dishonest conduct, including falsified customer reviews and other conduct that could interfere with Apple’s services.

618Media marketed an app called Reports AI: Followers Tracker. It experienced download spikes in October 2022, December 2022, and August 2023. Apple told 618Media in December 2022 that it was out of compliance with a provision prohibiting misleading, fraudulent, improper, unlawful, or dishonest acts and instructed it to monitor its app activity. 618Media responded that it suspected competitors from China were causing the spikes to sabotage its apps.

On August 23, 2023, Apple’s app-review team identified a separate issue involving the trademarked term “Chat GPT” in a recent app submission and advised 618Media to revise the app name and subtitle. About twelve hours later, before 618Media could respond, Apple sent a termination notice citing fraudulent conduct under the license agreement. 618Media appealed, but Apple denied the appeal. Later communications between Apple and 618Media’s counsel ended with Apple stating that it had properly exercised its discretion and would not reinstate the account.

Claims and analysis

Apple moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to plausibly support a legal claim. Apple argued that 618Media had not adequately pleaded claims for breach of the implied covenant of good faith and fair dealing, intentional interference with contractual relations, tortious interference with prospective business advantage, monopolization under Section 2 of the Sherman Act, or violation of California’s Unfair Competition Law.

For the implied-covenant claim, the court held that the agreements expressly permitted Apple to terminate 618Media’s account in its sole discretion. The court concluded that the implied duty of good faith could not impose a duty inconsistent with those express contract terms. It also held, alternatively, that 618Media had not pleaded enough facts to show bad faith through conduct outside the parties’ reasonable expectations, a lack of subjective belief in the validity of Apple’s actions, or objectively unreasonable conduct.

The court rejected 618Media’s argument that Apple lost its broader termination authority by citing the fraudulent-conduct provision in the termination notice. It found that the relevant provision was not limited to the examples listed and that other contract provisions preserved Apple’s discretion to terminate for any reason. The court also stated that the asserted reason for termination was irrelevant because the agreements permitted termination for any reason.

For the tortious-interference claims, the court held that a party who lawfully exercises rights granted by a contract is not liable for tortious interference. Because the agreements expressly permitted Apple to terminate the account, the court concluded that both interference claims failed.

For the Sherman Act claim, 618Media alleged monopolization. The court held that 618Media had not alleged sufficient facts showing anticompetitive conduct or antitrust injury. In particular, the court found that 618Media did not explain how excluding developers from the App Store harmed competition generally or produced a market-wide effect, rather than causing harm to an individual competitor.

For the California Unfair Competition Law claim, 618Media relied on the alleged Sherman Act violation and Apple’s alleged bad-faith termination. Because the court found that 618Media had not adequately alleged a Sherman Act violation and that Apple’s conduct was expressly permitted by the contracts, it also found that the Unfair Competition Law claim was insufficiently pleaded.

Disposition

The court granted Apple’s motion to dismiss the implied-covenant, tortious-interference, Sherman Act, and Unfair Competition Law claims, each with leave to amend. The court’s conclusion granted Apple’s motion to dismiss with leave to amend. It stated that 618Media could file an amended complaint by October 1, 2025. The opinion does not state that the dismissal was with prejudice or without prejudice.