A Tuesday antitrust complaint filed in the Northern District of California accused Apple Inc., maker of the Apple Watch, of foreclosing competition in the market for electro-cardiogram (ECG) capable smartwatches or wearable devices. The plaintiff, AliveCor Inc., contended that Apple forced it out of the App Store through underhanded conduct related to App Store policies and watchOS software updates.
The filing explained that AliveCor is “a leader in the design and development of products that provide intelligent, highly-personalized heart data to help diagnose heart conditions.” In 2015, when Apple rolled out its first smartwatch, the plaintiff and its founder, Dr. Dave Albert, developed a wristband for the Apple Watch, the KardiaBand, that was capable of recording an ECG. The plaintiff also introduced the accompanying Kardia app used to analyze band readings on the Apple Watch, and SmartRhythm, an app used to monitor heart rate and alert users to irregularities.
After receiving approval from the U.S. Food and Drug Administration (FDA) in 2017, AliveCor informed Apple of its clearance and intent to sell the KardiaBand. Unbeknownst to the plaintiff, Apple “had been working in the background to copy AliveCor’s ideas,” the filing stated.
Reportedly, the same day AliveCor notified Apple about its FDA approval, Apple “pre-announced” a heart initiative for the Apple Watch. AliveCor was subsequently told that SmartRhythm, available to Apple Watch users exclusively through Apple’s App Store, “‘violated’ various unwritten App Store guidelines.” AliveCor pushed back, and in response, Apple reportedly rewrote its rules.
According to the complaint, Apple pulled similar manoeuvres several more times while AliveCor parried to stay compliant. “Apple next resorted to behind-the-scenes acts of sabotage, consisting primarily of undocumented updates to the Apple Watch’s operating system,” the complaint explains next.
These unannounced updates would suddenly render SmartRhythm inoperable, the plaintiff claimed. In order to keep users online, AliveCor had to “drop everything” to update its software with haste.
Reportedly, in September 2018, Apple released the Series 4 Apple Watch, inherently equipped with the ability to record an ECG and a heart rate analysis app. Apple then released watchOS5, an update which, on purpose and in effect “prevent(ed) third parties from identifying irregular heart rate situations and, thus, from offering competing heart rate analysis apps,” the filing claimed. WatchOS5 was also pushed out to older device models, which rendered copies of SmartRhythm ineffective and KardiaBands useless for Series 1-3 Watch users.
As a result, the complaint claimed, AliveCor was forced to remove its impotent product from the App Store. The consequences, it claimed, have been “devastating to competition,” as Apple reportedly has a 100% monopoly on heart rate analysis apps on watchOS devices and a 70% share of the domestic ECG-capable smartwatch or wearable devices market.
For the alleged Sherman Act and California law violations, AliveCor seeks injunctive and declaratory relief, damages, including treble and punitive damages, and its attorneys’ fees and costs. The plaintiff is represented by Quinn Emanuel Urquhart & Sullivan LLP.
