Apple Can't Immunize Continued Antitrust Violations, Says Appellant Brief

Apple can't evade the law "that imposing new anticompetitive agreements and enforcing such agreements are each overt acts,” said SaurikIT, owner of third-party app store Cydia, in a reply brief Monday (docket 22-16527) in the 9th U.S. Circuit Court of Appeals. SaurikIT alleged in 2020 Apple was violating antitrust law in the app distribution and payment processing markets. Its Cydia third-party app store is available only on jailbroken Apple iOS devices.

In a March 13 appellee brief, Apple called SaurikIT’s December 2020 antitrust complaint against it “hopelessly time-barred” (see 2303150013). The lower court recognized SaurikIT sat “on the sidelines since 2008,” before “springing a ‘copycat’ suit in the long wake of other lawsuits challenging the same fundamental business model,” it said.

Apple’s response followed SaurikIT’s January opening brief, in which it asserted the U.S. District Court for Northern California’s “change” theory applied in SaurikIT v. Apple is “tantamount to the idea that because a business has committed an antitrust violation before, it can continue to commit the same antitrust violation with impunity.”

SaurikIT failed to allege any actions by Apple that are new and independent from the business model it adopted in 2008-2009, Apple said in its brief. The iPhone maker barred third-party app distributors like Cydia in 2008 and introduced an in-app purchase requirement in 2009, but SaurikIT “did not sue then or in the four years that followed,” Apple said. All its claims of “new acts” -- such as longstanding warranty requirements, provisions in developer agreements and concomitant enforcement policies -- are the “unabated inertial consequences” of Apple’s initial adoption of a centralized distribution platform, said the brief.

In its reply, SaurikIT said Apple can’t “rewrite the amended complaint to pretend that it fails to allege how Apple’s millions of anticompetitive agreements” and their enforcement “injured Cydia in new and accumulating ways within the limitations period.” Apple “cannot immunize its continuing antitrust violations by ignoring the many and consistent ways both the Supreme Court and this Court have rejected the arguments it makes.” Cydia’s claims, it said, “are timely.”

A new anticompetitive agreement is an overt act that can establish a continuing violation under the antitrust laws, asserted SaurikIT, saying Apple ignores cases from other circuit courts that are “directly on point,” such as the 3rd Court’s Hanover Shoe decision that the Supreme Court affirmed. Apple also fails to address the “explicit reasoning and holding of Samsung Elecs. Co. v Panasonic Corp., establishing that the adoption of the 2006 license was a “new and independent act” that caused “new and accumulating injury” because a prior license didn’t cover second-generation SD cards, said SaurikIT.

“Apple’s theory would make a mockery of the antitrust laws, with every defendant claiming that simply implementing and following an anticompetitive business model prevents later claims based on subsequent overt acts,” SaurikIT said.