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California companies face off over unfair competition allegations

| May 10, 2021 | Unfair competition litigation |

If you visit Apple’s online store, you’ll find the California-based technology giant’s gleaming gadgets, including the recently introduced AirTag. In its sales pitch for the tracking device that can help you find lost or stolen items, Apple echoes the Beatles: “Get by with a little help from hundreds of millions of friends.”

AirTag uses ultra-wideband technology and Apple’s existing network of devices – phones, tablets, watches, laptops – as crowdsourced locators of your missing AirTag-attached item. Apple’s “hundreds of millions of friends” ping each other to hone in on your item’s location.

Unfriendly neighbors

Apple fans are delighted by the unveiling of AirTags. Tile is not so pleased, however. The consumer electronics company essentially created a market with its popular Bluetooth-powered item finders – now threatened by the presence of one of the world’s tech titans. Tile’s California headquarters is just a few miles northwest of Apple’s enormous Cupertino campus.

The company’s general counsel recently told the Washington Post that Apple’s AirTags press release “paints the perfect picture of precisely how Apple uses its ownership and dominance over the entire ecosystem to disadvantage competition.”

Congressional testimony

A Tile representative recently testified before Congress about not only what it views as unfair competition regarding the AirTags, but also the unfairness of Apple’s in-app commissions as well. The commissions (often referred to as the “Apple Tax”) require vendors in the App Store to pay a portion of their revenues to Apple.

Tile in particular objects to the in-app commissions because it’s forced to pay the company it believes is engaging in unfair competition practices.

Types of unfair business activities

Some of the most common violations of California unfair competition law include:

  • Monopolization of markets or territories
  • Conspiring to divide up markets or territories
  • Conspiring to fix prices
  • Using dominant industry position to secure favorable, unfair prices
  • Conspiring with businesses to boycott a competitor

Apple says, Tile says

“We have always embraced competition as the best way to drive great experiences for our customers,” Apple said in response to Tile’s recent allegations. “We have worked hard to build a platform in iOS that enables third-party developers to thrive.”

Tile says it welcomes “competition, as long as it is fair competition. Unfortunately, given Apple’s well-documented history of using its platform advantage to unfairly limit competition for its products, we’re skeptical.”

Companies with similar unfair competition grievances will often file a business tort claim with the assistance of a skilled business law attorney to protect their interests, rights and market share.