Bloomberg News

Apple Asks Judge to Dismiss Suit Alleging IPhone Monopoly

March 06, 2013

Apple Asks Judge to Toss Suit Alleging IPhone App Monopoly

Applications are seen on an Apple Inc. iPhone in Washington, D.C. “Can a consumer go somewhere else to buy Angry Birds for the iPhone?” asked Alexander Schmidt, an attorney representing seven consumers who sued. “If the answer is no, then Apple is a monopolist.” Photographer: Andrew Harrer/Bloomberg

Apple Inc (AAPL) (AAPL). urged a federal judge to dismiss a consumer lawsuit alleging the company maintains a monopoly over iPhone applications.

Attorneys who filed the suit in 2011 claim that a monopoly exists because an iPhone user who doesn’t want to pay what developers charge for applications available through Apple’s App Store can’t go anywhere else to buy them. Apple (AAPL) requires iPhone software developers to turn over 30 percent of what they charge for an application, increasing prices and excluding competitors from the iPhone “aftermarket” of applications, they claim.

Apple doesn’t set the price for paid applications, and charging a price for distribution of a product on a new and unique platform doesn’t violate any antitrust laws, said Dan Wall, Apple’s attorney, at yesterday’s court hearing in Oakland, California.

“There’s nothing illegal about creating a system that is closed in a sense,” Wall told U.S. District Judge Yvonne Gonzalez Rogers.

“Can a consumer go somewhere else to buy Angry Birds for the iPhone?” asked Alexander Schmidt, an attorney representing seven consumers who sued. “If the answer is no, then Apple is a monopolist.”

Rogers didn’t say when she would rule on the matter.

Apple, based in Cupertino, California, faces a separate antitrust lawsuit before Rogers in which it’s accused of maintaining a music-downloading monopoly. It also faces an antitrust lawsuit in federal court in New York by the U.S. government, which accuses the iPad maker of conspiring to fix prices of digital books to undermine discounter Amazon.com Inc.’s dominance of the industry.

The case is In re Apple iPhone Antitrust Litigation 11- cv-06714, U.S. District Court, Northern District of California (Oakland).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.


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