Summary
The Ninth Circuit affirmed summary judgment for Apple in AliveCor’s Sherman Act § 2 monopolization and attempted-monopolization claims. The court held that Apple’s refusal to continue sharing data generated by an older heart-rate algorithm was properly analyzed as a refusal to deal, and that AliveCor failed to establish an exception to the general rule that a monopolist has no antitrust duty to deal with competitors. The court affirmed on grounds different from those relied on by the district court, which had treated Apple’s conduct as a per se lawful product improvement.
Topics
Practice areas
Questions Presented
- Whether Apple's cessation of sharing data from its original heart-rate algorithm with third-party developers constituted anticompetitive conduct under Sherman Act § 2.
- Whether the alleged conduct should be analyzed under the refusal-to-deal doctrine rather than solely as a product-design change or product improvement.
- Whether AliveCor established an exception to the general rule that a monopolist has no antitrust duty to deal, including the Aspen Skiing or essential-facilities doctrines.
- Whether summary judgment for Apple was proper on AliveCor's monopolization and attempted-monopolization claims.
Holdings
- Apple's refusal to continue sharing data from its original heart-rate algorithm with third-party developers was properly classified as a refusal to deal with competitors, even assuming that the refusal was separate from Apple's product improvement.
- A plaintiff challenging a monopolist's refusal to provide an input to competitors must establish an exception to the general rule that the Sherman Act does not impose an antitrust duty to deal.
- AliveCor could not prevail under the Aspen Skiing exception because it did not argue that the exception applied.
- AliveCor failed to establish an essential-facilities violation because HRPO data was not essential to competition and Apple provided developers access to alternative data through the Tachogram API.
- Apple was entitled to summary judgment because AliveCor failed as a matter of law to show anticompetitive conduct or an antitrust duty requiring Apple to share HRPO data.
Key quotations
“We affirm, although on different grounds than those offered by the district court.” (6)
“AliveCor therefore needs to establish an exception from that general rule to succeed on its Section 2 claims.” (18)
“The essential-facilities doctrine does not impose a duty on a monopolist to provide whatever the competitor believes would allow it to provide a superior product to the monopolist’s own and so to compete most effectively.” (25-26)
“Because AliveCor has failed to establish a violation of the essential-facilities doctrine and does not argue that Aspen Skiing applies, AliveCor has failed to show that Apple had a duty to share HRPO data with its competitors.” (26)
Factual background
AliveCor developed SmartRhythm, a feature for the Apple Watch that used data from Apple's Heart Rate Path Optimizer algorithm to detect episodes of atrial fibrillation. Apple later introduced the Heart Rate Neural Network algorithm, stopped sharing the original algorithm's data with third-party developers, and introduced its own Irregular Rhythm Notification feature using different data. AliveCor alleged that Apple withheld the original data to disable competing applications and maintain a monopoly in the market for heart-rhythm-analysis applications on the Apple Watch.
Procedural history
AliveCor sued Apple in the Northern District of California, alleging that Apple unlawfully denied third-party developers access to data generated by Apple's original heart-rate algorithm in order to disable competing heart-rhythm-analysis software. The district court granted Apple summary judgment, reasoning that Apple's replacement of the algorithm was a per se lawful product improvement under Allied Orthopedic Appliances, Inc. v. Tyco Health Care Group LP. The Ninth Circuit affirmed on the alternative ground that Apple's conduct was a refusal to deal and that AliveCor had not established an applicable exception to the general rule that a monopolist has no antitrust duty to deal.