Source: 9 to 5 Mac
Companies are often accused of product design alterations alleged to affect competition. It is these companies that often enjoy ‘freedom of design,’ whose limits, in turn are challenged by this case. A change in design is not one that generally runs afoul of the antitrust laws. However, US Judge Jeffrey S White from the Northern District of California denied a motion. The motion was of Apple Inc’s to dismiss an antitrust case brought against them by AliveCor Inc. According to the suit, the tech giant allegedly maintained its position in the market for apps of heart rate analysis unlawfully. They apparently did by updating the Apple Watch operating system, WatchOS on what the heart rate analysis apps of AliveCor runs.
These apps are normally used to determine the normality or abnormality of ones heart rate through sensors recording readings from the wrist. The app constantly runs when the device is worn, alerting users when they possibly require an ECG recording or medical analysis. AliveCor additionally sells an electrocardiogram-capable wrist band for the Apple Watch. Along with it, software related to WatchOS that assesses reading from the band.
AliveCor claims that its products—the ECG-wristband hardware and software and its heart rate analysis app—“helped change the perception of the Apple Watch from an accessory to a personal health monitoring tool.”
AliveCor claims that with the taking off of sales of its heart monitoring app, ‘SmartRhythm,‘ Apple announced a WatchOS update with its own app. Moreover, the tech giant apparently designed to exclude to AliveCor from the US market of apps for heart monitoring apps. SmartRhythm essentially works by taking data from heart rate algorithm of the Apple Watch. The complaint mentions that this algorithm was changed in order to prevent the detection of heart rate abnormalities by third-party developers.
The alleged changes in the design of WatchOS is a way to maintain Apple’s monopoly in the heart rate analysis market, according to AliveCor. This was in violation of Section 2 of the Sherman Act, Section 17200 of California Business, Professions Code, and California’s Unfair Competition Law.
The court denied the motion by Apple Inc to dismiss the claim of AliveCor regarding monopolisation. Listing the points stated by the court in Newcal Indus., Inc. v. Ikon Office Sol., 513 F.3d 1038, 1044 (9th Cir. 2008), the court ruled that the WatchOS app aftermarket was entirely derivative from the main market of smartwatch. Applying only to the aftermarket, Apple’s power was not acquired from contract terms concluded in the main market. Moreover, the race in this market does not essentially discipline anti-competitive practices in its aftermarket. To this, the tech giant argued that a firm that enhances a product for the consumers’ advantage, it does not violate laws of antitrust.
