Facts

Several purchasers of Apple Inc.'s iPhone filed an action against Apple, alleging antirust violations. In the complaint, they alleged antitrust claims based on unlawful monopolization and attempted monopolization of the aftermarket for iPhone applications, which plaintiffs claimed violated Sherman Act Section 2. They also alleged a claim for conspiracy to monopolize the iPhone voice and data services aftermarket, which they also claimed violated Section 2.

PLAINTIFF'S CONTENTIONS:
Plaintiffs alleged that Apple entered into a secret five-year contract with AT&T Mobility LLC that established AT&T as the exclusive provider of cell phone services for the iPhone until 2012, which effectively locked users into using AT&T for five years. Apple allegedly enabled the creation of applications by software developers to be used on the iPhone for an annul fee of $99, and allegedly refused to approve developers' apps if they did not agree to pay the fee. The complaint alleged that Apple thus discouraged consumers from downloading competing applications software in violation of antirust laws.

In particular, plaintiffs alleged that Apple had an exclusivity agreement with AT&T Mobility LLC, under which it kept exclusive control over the design, features, and operating software for the iPhone. They claimed Apple then enabled the creation of programs called "applications," such as ringtones and instant messages, Internet access, entertainment, video and photography enabling software that could be downloaded by users of the iPhone. Plaintiffs alleged that in March 2008, Apple released a "software developer kit" (SDK) to let independent software developers design applications for the iPhone, and that for an annual fee of $99, developers could submit applications to be distributed in Apple's ITunes App Stores. Plaintiffs claimed that if not made available for free, Apple collected 30 percent on the sale of each application. Plaintiffs claimed that Apple refused to approve applications by developers if they did not pay the fee, and discouraged customers from downloading competing applications software by telling them that Apple would refuse to honor the iPhone warranty if they downloaded other apps. Plaintiffs argued that iPhone consumers were therefore, not given a way to download other, unapproved apps, stifling competition, reducing output and consumer choice, and artificially increasing prices in the aftermarket for iPhone apps.

DEFENDANT'S CONTENTIONS:
Apple argued that plaintiffs did not have standing to file the lawsuit because no named plaintiff alleged that he or she ever purchased an app or was overcharged, or that any overcharge was caused by the allegedly wrongful conduct. Defendant argued that plaintiffs did not allege they were unaware of the apps policy or were not misled by the policy.

Result

The court granted Apple's motion to dismiss based on lack of standing with leave to amend, giving plaintiffs 21 days to file a second amended complaint.