Apple Must Face iPhone Tracking Class Action Lawsuit

A federal judge has ruled Apple may be liable for secretly tracking iPhone, iPad and iPod users without their permission, but has cleared the application developers of any liability.

U.S. District Judge Lucy Koh ruled that the Plaintiffs in the consolidated class action lawsuit, In re: iPhone Application Litigation, sufficiently showed Apple was responsible for transmitting the personal information of iPhone, iPad and iPod Touch users to the application companies.  

The Apple tracking class action lawsuit was filed last year after researchers publicized that Apple was secretly recording and storing details of iPhone and iPad users’ every move, even when they indicated they did not want such information shared by switching off location services in the devices’ settings.

Apple and the developers faced claims of having violated consumers’ privacy rights by letting third-party applications that run on Apple devices collect and profit from users’ personal information without their knowledge.

Apple tried unsuccessfully to dismiss the class action lawsuit, arguing that the Plaintiffs did not identify a “single, concrete injury inflicted on any one of the Plaintiffs here, much less one that is traceable to [Apple.]”

Koh rejected the argument, saying that the “Wiretap Act provides that any person whose electronic communication is ‘intercepted, disclosed, or intentionally used’ in violation of the act may in a civil action recover from the entity which engaged in that violation.”

Koh pointed to claims that Apple designed its products to allow personal information to be transmitted to third parties.

“This transfer has led to the consumption of bandwidth and storage space on their iDevices and has led them to overpay for their devices,” Koh said, summarizing the complaint. “Thus … plaintiffs have sufficiently articulated the alleged injury is fairly traceable to the conduct of both defendants.”

Koh also agreed with the Consumers Legal Remedies Act claim that Apple’s failure to disclose its practices regarding the supposedly free apps makes consumers’ devices overpriced.

“Had Apple disclosed the true cost of the purportedly free Apps … the value of the iPhones would have been materially less than Plaintiffs paid,” Koh wrote.

 

Judge Koh also refused to dismiss allegations of unfair competition at this stage. According to the ruling, Plaintiffs have “alleged breaches of Apple’s representations that it would not track consumer’s whereabouts.”

The court also found that the class sufficiently alleged that Apple tracked and disclosed user information despite representations to Congress, and in its Terms and Conditions, that consumers could opt out of the geo-tracking feature of their device by turning off the Location Services setting on their devices.

Koh did, however, dismiss all allegations against the third-party application companies, finding that Apple’s devices are not facilities through which an electronic communication service can be provided. She also found that Plaintiffs could not show the developers had accessed data that was in “electronic storage,” as required under the Stored Communications Act.

Koh also dismissed allegations against Apple under the Wiretap Act, Stored Communications Act, Computer Fraud and Abuse Act, invasion of privacy, negligence, computer fraud, trespass, conversion and unjust enrichment. The claims against Apple for violations of the Unfair Competition Law and Consumer Legal Remedies Act remain.

A copy of Judge Koh’s ruling in the Apple iPad/iPad Tracking Class Action Lawsuit case can be found here.

The case is In Re: iPhone Application Litigation, Case No. 11-MD-02250-LHK, U.S. District Court, Northern District of California, San Jose Division.