D.C. Circuit Affirms Dismissal Of App Developer’s Antitrust Claims Against Apple

On July 24, 2026, the United States Court of Appeals for the D.C. Circuit affirmed the district court’s dismissal of antitrust claims brought by PhantomALERT Inc. against Apple Inc.  PhantomALERT Inc. v. Apple Inc., No. 25-7017 (D.C. Cir. July 24, 2026).  Plaintiff’s complaint centered on allegations that defendant unlawfully tied the sale of iPhones to use of the App Store and monopolized access to apps on iPhones, in violation of the Sherman Act and California antitrust and unfair-competition law.  Rather than opposing defendant’s motion to dismiss, plaintiff filed an amended complaint.  The D.C. Circuit affirmed the district court’s dismissal of plaintiff’s original complaint and denial of leave to late-file an amended complaint as futile for failing to allege a properly defined, relevant antitrust market.

Plaintiff provides a traffic app with live traffic safety information, road hazards, and other information.  In March 2020, plaintiff retooled its crowdsourcing traffic application to track and map the spread of Covid-19.  Defendant allegedly rejected the app update, citing new guidelines it had implemented to ensure the reliability of App Store distributed Covid-19-related information, including, for example, that any such apps be provided by health organizations or governmental entities.  Soon thereafter, defendant launched its own Covid-19 app in collaboration with the federal government.

Plaintiff contended that defendant’s bar on accessing apps outside the App Store, combined with these more stringent shifting developer guidelines, amounted to: (1) unlawful tying of the iPhone to the App Store under Sherman Act § 1; (2) monopolization of “access to apps on iPhones” under Sherman Act § 2; (3) monopolization of “access to Covid-19-related tracing apps in the App Store for use in the United States” under Sherman Act § 2; (4) violation of the California Cartwright Act; and (5) violation of the California Unfair Competition Law.  In response to defendant’s motion to dismiss, plaintiff filed an amended complaint, but after the 21-day window for amending its complaint had closed.  The parties traded filings around the late-filed amended complaint, with the district court ultimately dismissing the original complaint without prejudice (finding defendant’s motion to dismiss conceded by plaintiff) and denying leave to late-file the amended complaint because doing so would have been futile due to a failure to define the relevant product or geographic components of a market.  Plaintiff appealed this final decision to the D.C. Circuit under 28 U.S.C. § 1291, with the D.C. Circuit reviewing de novo whether plaintiff’s amended complaint states a claim for relief.

For Sherman Act claims, a plaintiff must plausibly allege a relevant antitrust market consisting of all products reasonably interchangeable by consumers for the same purposes (typically containing both a product component and a geographic component).  There are various ways for plaintiffs to define relevant markets, including the hypothetical monopolist test and practical indicia (e.g., industry or public recognition, peculiar characteristics, distinct customers or prices, etc.).  While relevant product allegations do not need to be detailed, they must extend beyond conclusory statements or formulaic recitations.  Here, the amended complaint suggested three relevant product markets, with the antitrust claims hinging on the latter two: (1) a U.S. smartphone foremarket; (2) an aftermarket for “access to apps on the iPhone”; and (3) a submarket of “access to Covid-19-related tracing apps in the App Store for use in the United States.”

For relevant product market (2)—aftermarket access to apps on the iPhone—the amended complaint alleged that the App Store is a single-brand aftermarket.  The D.C. Circuit has not articulated how to accurately define a single-brand aftermarket, so plaintiff proposed two alternative theories: (a) a lock-in theory where customers are generally unaware of aftermarket restrictions when buying a foremarket product; and (b) a foremarket theory where significant market power in the foremarket can suppress competition in a related aftermarket, regardless of actual lock-in effect.  The D.C. Circuit rejected plaintiff’s lock-in theory because plaintiff failed to allege a lack of substitutes for the App Store—noting the availability of web-based alternatives that can be accessed via web browser.  The D.C. Circuit also rejected the foremarket theory because plaintiff’s failure to advance the theory before the district court forfeited its reliance on the theory on appeal.  On this basis, the D.C. Circuit determined that Counts 1 and 2 of the amended complaint (tying under Sherman Act § 1 and monopolization under Sherman Act § 2) failed to state a claim.

For relevant product market (3)­—access to the Covid-19-related tracing apps in the App Store—plaintiff argued that Covid-19 tracking apps perform a unique, pandemic-specific function not substitutable by other apps.  The D.C. Circuit determined that the amended complaint failed to adequately draw the market boundaries, noting that plaintiff conflated a market of “access” to Covid-19 apps with a market consisting of the apps themselves (whereby the former would include every competitor to the App Store).  Additionally, the D.C. Circuit viewed the allegation that such apps “are not substitutable for other apps” because they perform a Covid-19-specific function as amounting to little more than a formulaic label and conclusion.  On this basis, the D.C. Circuit determined that Count 3 of the amended complaint (monopolization under Sherman Act § 2) also failed to state a claim.

Regarding the California state-law claims, plaintiff did not dispute that its California Cartwright Act claim depended on the validity of the Sherman Act claims and failed to appeal the district court’s dismissal of the California Unfair Competition Law claim.

The D.C. Circuit accordingly affirmed the district court’s dismissal and confirmed that the dismissal was without prejudice.  While market definition is typically a fact-intensive inquiry that courts hesitate to resolve at the pleading stage, this case illustrates that antitrust complaints remain vulnerable to dismissal under Rule 12(b)(6) when plaintiffs fail to ground their proposed market in a plausible factual context.