Articles Tagged with antitrust

Last week, on October 26, Kickflip, Inc. (doing business as, and hereinafter referred to as, Gambit) filed a lawsuit against Facebook, Inc. in the U.S. District Court for the District of Delaware, alleging violations of federal antitrust laws.

According to its complaint, Gambit was “a leading virtual-currency and payment-processing provider” to developers that published games for social networks, including Facebook. Gambit explains that “[s]ocial games are usually free to play,” relying on a competitive market of virtual currency and payment-processing service providers to transfer virtual currency into actual revenue for the developer.

However, according to Gambit, Facebook began offering its own virtual-currency services in 2009, but with a 30% fee. When Facebook’s services failed to gain significant market (a failure Gambit attributes to its high fee), it allegedly began engaging in anticompetitive behavior, such as requiring game developers on its platform to use the Facebook virtual-currency services. The complaint alleges that Facebook subsequently required exclusive use of its own virtual-currency services.

On Monday, Apple filed an Ex parte application for discovery against Motorola Mobility (‘Motorola’) to defend against the Google subsidiary’s patent claims in Germany. Motorola’s claims allege that Apple’s iPhone and iPad wireless devices infringe two of the company’s European patents.

One central Apple legal defense to Motorola’s European patent claims is that the telecommunications hardware maker would not offer it fair, reasonable, and non-discriminatory (‘FRAND’) licensing terms over the wireless patents in dispute, “in violation of German and European antitrust laws.”

FRAND contract disputes also remain an issue in the companies’ U.S. patent lawsuits. In Wisconsin, for example, Apple declared today that Motorola’s essential wireless patents are worth, at most, only one dollar per iPhone.

Motorola’s European patents at issue involve:

• EP 1 010 336 (the ‘336 patent) — Method for Performing a Countdown Function During a Mobile-Originated Transfer for a Packet Radio System
• EP 1 053 613 (the ‘613 patent) — Method and System for Generating a Complex Pseudonoise Sequence for Processing a Code Division Multiple Access Signal

The relief sought by Apple under 28 U.S. § 1782 is commonly used when parties litigating abroad can assist foreign courts with relevant information in dispute, the request is reasonable and narrowly tailored, no foreign prohibition exists against the request, and no foreign prohibition exists against the request.

A consumer Apple iPhone class-action antitrust lawsuit (read it below) accuses the Cupertino, California, company of conspiring to monopolize early iPhone purchasers’ voice and data plans by locking them into exclusivity contracts with AT&T Mobility, in violation of federal antitrust law.

The proposed class of plaintiffs includes consumers who bought iPhones between October 19, 2008, and February 3, 2011. This corresponds to the period of time when Apple sold three versions of the company’s iPhone: the original, 3G, and 3Gs models.

The plaintiffs are asking for a permanent injunction prohibiting Apple from selling locked iPhones that can be be used only with AT&T Mobility SIM cards, unless consumers get adequate disclosure before their purchase, and an order requiring Apple to give an unlock code to any iPhone customer who wants one.

Plaintiffs Zack Ward and Thomas Buchar also seek an unspecified amount of treble damages against Apple under federal law, in addition to attorneys fees. Apple is the sole defendant in the lawsuit; neither AT&T Mobility, nor any related business units at the telecom was named a party.

The suit alleges that Ward and Buchard each wanted to switch their iPhone plans from AT&T to a different, competing telecom provider. Buchar also contends that by locking iPhone customers’ SIM cards when traveling outside the U.S., he was unable “to switch his iPhone service to a local voice and data service provider while roaming.”

The lawsuit chastises AT&T for unlocking SIM cards on other phones it sells, like Blackberry and Samsung devices, and claims that “[t]here is but one exception: the iPhone,” citing a five-year exclusivity agreement between Apple and AT&T Mobility.

This case has a quite a few hurdles to overcome, however.