Case 2:22-cv-01599-KKE Document 110 Filed 05/21/24 Page 1 of 34
`
`The Honorable Kymberly K. Evanson
`
`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`STEVEN FLOYD, JOLENE FURDEK, and
`JONATHAN RYAN on behalf of
`themselves and all others similarly situated,
`Plaintiffs,
`
`v.
`AMAZON.COM INC. and APPLE INC.,
`Defendants.
`
`Case No. 2:22-cv-01599 KKE
`APPLE INC.’S ANSWER TO SECOND
`AMENDED CLASS ACTION
`COMPLAINT
`
`INTRODUCTORY STATEMENT TO APPLE’S ANSWER
`The Global Tenets Agreement (“GTA”) is a vertical distribution agreement intended to
`govern the sale of Apple products on Amazon.com by combating rampant sales of counterfeit
`products, addressing the serious safety and quality concerns fake products raise, and protecting
`Apple’s brand and intellectual property interests. Among other things, the GTA has significantly
`reduced counterfeits and deceptive marketing practices, ensuring a premium purchasing
`experience for customers seeking genuine Apple products on Amazon.com. This goal of
`benefitting consumers is achieved by Apple’s non-discriminatory identification of authorized
`resellers permitted to sell on Amazon.com and Amazon’s commitment to implement new
`safeguards to prevent counterfeit products from being sold to consumers. The GTA also benefits
`consumers by allowing Amazon to sell a broader array of Apple products on its online platform.
`The result is a pro-competitive agreement that ensures that consumers shopping on Amazon.com
`APPLE INC.’S ANSWER TO AMENDED
`CLASS ACTION COMPLAINT: 2:22-cv-
`01599 JCC
`
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`401 Union Street, Suite 3300
`Seattle, Washington 98101
`+1 206 839 4300
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`Case 2:22-cv-01599-KKE Document 110 Filed 05/21/24 Page 2 of 34
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`receive genuine Apple products with greater protection against counterfeits and knockoffs.
`Plaintiffs now seek to reverse these benefits based on an untenable antitrust theory.
`Plaintiffs’ Second Amended Complaint largely ignores the context that caused Apple to
`improve its product distribution on Amazon.com and from which the GTA arose: In the mid-
`2010s, Apple identified a significant problem with the sale of Apple products on Amazon.com.
`Test purchases by Apple employees repeatedly returned a high rate of counterfeit and mislabeled
`products. These phony products attracted consumers due to their apparently low prices,
`threatening Apple’s brand and consumer perception of its products due to the counterfeit
`products’ inferior quality and even the risk of physical injury.
`Apple first sought to address this counterfeiting problem by proceeding directly against
`the sellers of counterfeit products.1 Through litigation against nine companies selling
`counterfeit Apple products on Amazon.com, Apple obtained consent judgments that
`permanently enjoined these companies from selling counterfeit Apple products.2 Unfortunately,
`these efforts did not solve the problem, as new counterfeiters popped up to replace those now
`barred. Apple recognized that pursuing individual counterfeiters through a “Whac-A-Mole”
`litigation tactic would be costly and ineffective. To better protect consumer experiences and its
`brand, Apple needed a more comprehensive solution.
`Apple’s solution to the problem is embodied in the GTA, which Apple and Amazon
`negotiated and entered into in 2018. Apple agreed to identify trusted authorized resellers that,
`in addition to Amazon, would sell genuine Apple products on Amazon.com. Apple approached
`a significant number of authorized resellers, but only a subset were interested in selling under
`the GTA. Amazon agreed to limit the ability to sell Apple products on its platform to those
`trusted resellers. The GTA has enhanced the customer experience for purchasers of Apple
`
`1 Second Amended Complaint ¶ 36, Apple Inc. v. Mobile Star, LLC, No. 3:16-cv-06001-WHO, 2017 WL
`4297209 (N.D. Cal. Aug. 30, 2016).
`2 The consent judgments also required the counterfeiters to destroy the counterfeit items already in possession.
`See Consent Judgment, Apple Inc. v. Mobile Star, LLC, No. 3:16-cv-06001-WHO, (N.D. Cal. Nov. 21, 2018)
`(Dkt. 234).
`APPLE INC.’S ANSWER TO SECOND
`AMENDED CLASS ACTION
`COMPLAINT: 2:22-cv-01599 KKE
`
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`401 Union Street, Suite 3300
` Seattle, Washington 98101
`+1 206 839 4300
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`Case 2:22-cv-01599-KKE Document 110 Filed 05/21/24 Page 3 of 34
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`products on Amazon.com, as evidenced by the steep decrease in the number of counterfeit Apple
`products sold.
`Courts routinely uphold “vertical” distribution agreements like the GTA because they
`promote competition between brands—so called “interbrand competition.”3 The GTA does
`precisely that by ensuring the supply of genuine Apple products and a premium purchasing
`experience, enabling Apple to maintain its brand reputation and vigorously compete against
`other smartphone and tablet offerings. As the Supreme Court has explained, antitrust law exists
`“to protect this type of competition,” not to frustrate it.4
`Plaintiffs inappropriately brush aside the GTA’s pro-consumer benefits while asserting
`a befuddled and inconsistent theory of unlawful conduct. But they will be unable to prove the
`elements of their antitrust claims (and, indeed, will be unable to prove the prerequisites to class
`certification). Plaintiffs’ only assertion of anticompetitive injury to consumers is that alleged
`gross average prices of new iPads and iPhones sold on Amazon.com increased after the GTA
`went into effect. Yet, and to the benefit of consumers, that is exactly what one would expect
`after the GTA effectively removed low-priced counterfeits. Plaintiffs do not make any factual
`allegations that the price of genuine new iPads and iPhones increased, let alone that the output
`of such products was reduced. Indeed, they will be unable to do so in any properly defined
`antitrust market, given the many distribution channels through which genuine iPads and iPhones
`are sold.
`Plaintiffs’ entire theory independently fails because it depends on a gerrymandered
`market definition that makes no economic sense. They first wrongly characterize the relevant
`relationship between Apple (as a manufacturer) and Amazon (as a reseller) as “horizontal” rather
`than “vertical.” The Court has already recognized that the GTA is a vertical distribution
`agreement. They further inappropriately conflate Amazon (as a marketplace operator) with
`
`3 Cont’l T. V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 54-55 (1977); see also Krehl v. Baskin-Robbins Ice Cream
`Co., 664 F.2d 1348, 1356-57 (9th Cir. 1982) (“Competition is promoted when manufacturers are given wide
`latitude in establishing their method of distribution and in choosing particular distributors.”).
`4 Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 890 (2007).
`APPLE INC.’S ANSWER TO SECOND
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`AMENDED CLASS ACTION
`401 Union Street, Suite 3300
`COMPLAINT: 2:22-cv-01599 KKE
` Seattle, Washington 98101
`+1 206 839 4300
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`Case 2:22-cv-01599-KKE Document 110 Filed 05/21/24 Page 4 of 34
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`Amazon (as a reseller), ignoring that Amazon is itself a vertically integrated company.5 Once
`their confused markets are disentangled, it becomes clear that Plaintiffs’ claim is an artificial
`and weak vertical foreclosure claim on Amazon.com only. The nub of Plaintiffs’ complaint is
`really that a marketplace (acting upstream on its own site) has restricted the number of
`downstream resellers on that site. Yet, even this fatally flawed theory concedes that Amazon
`(as a reseller) continues to compete with other resellers on Amazon.com and resellers on other
`“Online Marketplaces.”
`Plaintiffs’ claim is even further flawed when one considers the many other retailers and
`resellers that sell to smartphone and tablet customers through other, easily accessible channels,
`such as apple.com. Plaintiffs present fundamentally inconsistent claims that Apple and Amazon
`are horizontal competitors but that Apple.com and Apple retail locations are outside of the
`relevant market. If, as Plaintiffs allege, Apple and Amazon are horizontal competitors (among
`other retail channels), then it would defy common and economic sense that consumers cannot
`substitute or switch between competitors selling the same Apple products. The resulting
`gerrymandered proposed relevant market, which does not include obvious alternatives and relies
`on a nonsensical asymmetric substitution argument, is fatally flawed. Indeed, they will be
`unable to prove either classwide harm or that the GTA restrains trade either in their preferred
`(but improper) market or in any properly defined relevant market.
`APPLE’S ANSWER TO PLAINTIFFS’ SECOND AMENDED COMPLAINT
`Pursuant to Rules 7 and 8 of the Federal Rules of Civil Procedure, Defendant Apple Inc.
`(“Apple”), by and through its undersigned counsel, submits the following Answer to Plaintiffs’
`Second Amended Class Action Complaint.
`
`5 Plaintiffs recognize that “the Amazon marketplace itself is not a retailer but rather a two-sided platform
`mediating transactions between retailers and sellers” and that “’Online Marketplaces’…constitute a separate
`relevant antitrust market.” Second Amended Class Action Complaint ¶ 44, n. 37 (emphasis in original). Yet
`Plaintiffs inappropriately merge these separate alleged markets into a single market by consistently conflating
`Amazon’s alleged market power as an “Online Marketplace” with its ability to raise prices and reduce output as a
`retailer. See, e.g., Second Amended Class Action Complaint ¶¶ 63-70, 80, 108, 112.
`APPLE INC.’S ANSWER TO SECOND
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`AMENDED CLASS ACTION
`401 Union Street, Suite 3300
`COMPLAINT: 2:22-cv-01599 KKE
` Seattle, Washington 98101
`+1 206 839 4300
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`Case 2:22-cv-01599-KKE Document 110 Filed 05/21/24 Page 5 of 34
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`RESPONSES TO INDIVIDUAL PARAGRAPHS
`Numbered paragraphs below correspond to the like-numbered paragraphs in the Second
`Amended Complaint. Except as specifically admitted, Apple denies the allegations in the
`Second Amended Complaint, including without limitation the Table of Contents, headings,
`subheadings, and illustrations contained within the Second Amended Complaint. Apple denies
`that Plaintiffs are entitled to any of the relief requested.
`Plaintiffs’ Second Amended Complaint contains 121 footnotes. Any allegations
`contained therein do not comply with Federal Rule of Civil Procedure 10(b), providing that
`allegations be stated “in numbered paragraphs, each limited as far as practicable to a single set
`of circumstances.” Fed. R. Civ. P. 10(b); see, e.g., Dahlstrom v. United States, C-16-1874-RSL,
`2018 WL 1046829, at *4 (W.D. Wash. Feb. 26, 2018) (“The proposed complaint is extraordinary
`for its length, its repetition, the inappropriate use of footnotes and citations, and the presentation
`of the case in a manner that is seemingly designed to confuse rather than enlighten.”); Bernath
`v. YouTube LLC, 2017 WL 1050070, at *2 (M.D. Fla. Mar. 20, 2017) (“Plaintiff also alleges
`facts in various and lengthy footnotes that will not be considered as they are not properly stated
`in numbered paragraphs pursuant to Fed. R. Civ. P. 10(b).”); Holmes v. Gates, 2010 WL 956412,
`at *1 n.1 (M.D. Pa. Mar. 11, 2010) (“[T]he use of . . . footnotes run counter to the pleading
`requirements set forth by Federal Rule of Civil Procedure 10(b).”). No response is therefore
`required to the Second Amended Complaint’s footnotes. In any event, except as expressly
`admitted, Apple denies any and all allegations contained in footnotes 1 through 121.
`Plaintiffs’ unnumbered initial paragraph contains a characterization to which no response
`is required. If a response is required, Apple denies the allegations in Plaintiffs’ unnumbered
`initial paragraph.
`
`INTRODUCTION
`I.
`In response to Paragraph 1, Apple admits that Amazon is a reseller of Apple
`1.
`products. Apple further admits that Apple is a company that manufactures and markets
`smartphones, personal computers, tablets, wearables and accessories, and sells a variety of
`
`APPLE INC.’S ANSWER TO SECOND
`AMENDED CLASS ACTION
`COMPLAINT: 2:22-cv-01599 KKE
`
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`Case 2:22-cv-01599-KKE Document 110 Filed 05/21/24 Page 6 of 34
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`related services. Apple further admits that it sells its products to consumers directly through its
`retail and online stores, and that Apple also employs a variety of indirect distribution channels,
`such as third-party cellular network carriers, wholesalers, retailers and resellers. Apple lacks
`knowledge or information sufficient to form a belief as to the truth of the remaining allegations
`in Paragraph 1 regarding Amazon and, on that basis, denies them. Apple admits that footnotes
`1 and 2 purport to characterize a third-party source, which speaks for itself. Apple denies the
`remaining allegations in Paragraph 1 and footnotes 1 and 2.
`2.
`In response to Paragraph 2, Apple admits that it competes through its retail and
`online stores against numerous other sellers and resellers of its products and other consumer
`electronics products, including Amazon and other Apple resellers on Amazon Marketplace.
`Apple lacks knowledge or information sufficient to form a belief as to the truth of the allegations
`in Paragraph 2 regarding Amazon’s product offerings, incentives, and profits and, on that basis,
`denies them. Apple denies the remaining allegations in Paragraph 2.
`3.
`In response to Paragraph 3, Apple admits that it sells Apple products directly to
`consumers and employs a variety of indirect distribution channels. Apple further admits that
`Amazon sells Apple products as a reseller on Amazon.com. Apple also admits that certain third
`parties sell Apple products on Amazon.com and through numerous other distribution channels.
`Apple admits that it competes through its retail and online stores against numerous other sellers
`and resellers of its products and other consumer electronics products, including Amazon and
`other Apple resellers on Amazon Marketplace. Apple lacks knowledge or information sufficient
`to form a belief as to the truth of the remaining allegations in Paragraph 3 regarding all other
`actions of Amazon and third-party merchants and, on that basis, denies them. Apple denies the
`remaining allegations in Paragraph 3.
`4.
`Paragraph 4 contains allegations regarding an alleged horizontal agreement, but
`the Court held that Apple and Amazon are “vertically situated as manufacturer and reseller under
`the agreement at issue here.” Dkt. 61. Apple denies the allegations in Paragraph 4.
`
`APPLE INC.’S ANSWER TO SECOND
`AMENDED CLASS ACTION
`COMPLAINT: 2:22-cv-01599 KKE
`
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`In response to Paragraph 5, Apple admits that Amazon has been a reseller of
`5.
`certain Apple products on Amazon.com. Apple lacks knowledge or information sufficient to
`form a belief as to the truth of the remaining allegations in Paragraph 5 and, on that basis, denies
`them. In response to footnote 3, Apple admits that Plaintiffs purport to define “third-party
`merchants” but specifically denies the accuracy of such definition.
`6.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 6 regarding “Amazon’s own share of the sale of Apple products
`on Amazon marketplace” and, on that basis, denies them. Footnote 4 contains a cross-reference
`to which no response is required. To the extent any response is required, Apple reincorporates
`its responses contained in Section IV.A. (Paragraphs 29-33) as set forth herein. Apple admits
`that Paragraph 6 and footnote 5 purport to characterize a since-vacated AGCM decision, which
`speaks for itself and has no current legal effect. Apple denies the remaining allegations in
`Paragraph 6 and footnote 5.
`7.
`In response to Paragraph 7, Apple admits that Apple and Amazon executed the
`GTA on October 31, 2018, with an effective date of November 1, 2018. Apple further admits
`that, in January 2019, the GTA authorized seven authorized resellers to sell on Amazon
`Marketplace. Apple admits that Paragraph 7 and footnotes 6 and 7 purport to characterize a
`since-vacated AGCM decision, which speaks for itself and has no current legal effect. Apple
`admits Paragraph 7 and footnote 8 purport to characterize the GTA, which speaks for itself.
`Apple denies the remaining allegations in Paragraph 7 and footnotes 6 through 8. Apple
`specifically denies that the GTA is an “Unlawful Boycott Agreement.”
`8.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 8 and footnote 9 and, on that basis, denies them. Apple also lacks
`knowledge or information sufficient to form a belief as to the accuracy of the figure below
`Paragraph 8 and, on that basis, denies it.
`9.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 9 regarding Amazon’s profits and, on that basis, denies them.
`
`APPLE INC.’S ANSWER TO SECOND
`AMENDED CLASS ACTION
`COMPLAINT: 2:22-cv-01599 KKE
`
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`Case 2:22-cv-01599-KKE Document 110 Filed 05/21/24 Page 8 of 34
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`Apple denies the remaining allegations in Paragraph 9. Apple lacks knowledge or information
`sufficient to form a belief as to the accuracy of the figure below Paragraph 9 and, on that basis,
`denies it.
`Apple denies that Plaintiffs or the proposed Class suffered any damages. Apple
`10.
`lacks knowledge or information sufficient to form a belief as to the truth of the remaining
`allegations in Paragraph 10 and, on that basis, denies them.
`11.
`Apple admits that Paragraph 11 and footnotes 10 and 12 selectively quote a
`House Report, which speaks for itself. Apple admits that Paragraph 11 and footnote 11 purport
`to characterize a since-vacated AGCM decision, which speaks for itself and has no current legal
`effect. Apple denies the remaining allegations in Paragraph 11 and footnotes 10 through 12.
`12.
`In response to Paragraph 12, Apple admits that it competes through its retail and
`online stores against numerous other sellers and resellers of Apple’s own products and other
`consumer electronics products, including Amazon and other Apple resellers on Amazon
`Marketplace. Apple lacks knowledge or information sufficient to form a belief as to the truth of
`the remaining allegations in Paragraph 12 regarding Amazon, and, on that basis, denies them.
`Apple denies the remaining allegations in Paragraph 12.
`13.
`Paragraph 13 contains allegations regarding an alleged horizontal agreement, but
`the Court held that Apple and Amazon are “vertically situated as manufacturer and reseller under
`the agreement at issue here.” Dkt. 61. Apple admits that Paragraph 13 and footnote 13 purport
`to characterize Amazon’s Congressional Responses, which speak for themselves. Apple further
`admits that, in January 2019, the GTA authorized seven authorized resellers to sell on Amazon
`Marketplace. Apple denies the remaining allegations in Paragraph 13 and footnote 13.
`14.
`Apple admits that Paragraph 14 and footnote 14 purport to characterize reports
`and articles, which speak for themselves. Apple lacks knowledge or information sufficient to
`form a belief as to the truth of the allegations in Paragraph 14 regarding Amazon’s market share
`and, on that basis, denies them. Apple denies the remaining allegations in Paragraph 14 and
`
`APPLE INC.’S ANSWER TO SECOND
`AMENDED CLASS ACTION
`COMPLAINT: 2:22-cv-01599 KKE
`
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` Seattle, Washington 98101
`+1 206 839 4300
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`Case 2:22-cv-01599-KKE Document 110 Filed 05/21/24 Page 9 of 34
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`footnote 14. In response to footnote 14, Apple further incorporates its responses from Sections
`V.A-C (Paragraphs 77-124).
`15.
`Apple denies the allegation in Paragraph 15 and footnote 15.
`II.
`JURISDICTION AND VENUE
`In response to Paragraph 16, Apple admits that, based on the allegations in the
`16.
`Second Amended Complaint, the Court has subject matter jurisdiction. Apple denies the
`remaining allegations in Paragraph 16.
`17.
`In response to Paragraph 17, Apple admits that, based on the allegations in the
`Amended Complaint, the Court has subject matter jurisdiction. Apple denies that there is a
`certifiable class. Apple denies the remaining allegations in Paragraph 17.
`18.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 18 and, on that basis, denies them.
`19.
`In response to Paragraph 19, Apple admits that it is incorporated in California
`and headquartered in Cupertino, California. Apple further admits that it sells Apple products
`directly to consumers and employs a variety of indirect distribution channels. Apple admits that
`the Court has personal jurisdiction over Apple for this matter only. Apple lacks knowledge or
`information sufficient to form a belief as to the truth of the allegations regarding Amazon’s
`business, and, on that basis, denies them. Apple denies the remaining allegations in Paragraph
`19.
`
`In response to Paragraph 20, Apple admits that venue lies in this District for
`20.
`purposes of this matter only. Apple admits that Paragraph 20 and footnote 17 purport to
`characterize a page from Amazon’s website, which speaks for itself. Apple denies the remaining
`allegations in Paragraph 20 and footnote 17.
`PARTIES
`III.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`21.
`of the allegations in Paragraph 21 and, on that basis, denies them.
`
`APPLE INC.’S ANSWER TO SECOND
`AMENDED CLASS ACTION
`COMPLAINT: 2:22-cv-01599 KKE
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` Seattle, Washington 98101
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`Apple lacks knowledge or information sufficient to form a belief as to the truth
`22.
`of the allegations in Paragraph 22 and, on that basis, denies them.
`23.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 23 and, on that basis, denies them.
`24.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 24 and, on that basis, denies them.
`25.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 25 and, on that basis, denies them.
`26.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 26 and, on that basis, denies them.
`27.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 27 and, on that basis, denies them.
`28.
`In response to Paragraph 28, Apple admits that it maintains its headquarters and
`principal place of business in Cupertino, California. Apple further admits that it manufactures
`and markets smartphones, personal computers, tablets, wearables and accessories, and sells a
`variety of related services. Apple denies the remaining allegations in Paragraph 28.
`IV.
`RELEVANT FACTS
`In response to Paragraph 29, Apple admits that it sells Apple products directly to
`29.
`consumers and employs a variety of indirect distribution channels. Apple also admits that it
`enters into agreements with its Authorized Resellers governing the resale of Apple products.
`Apple admits that Paragraph 29 and footnote 18 purport to characterize a since-vacated AGCM
`decision, which speaks for itself and has no current legal effect. Apple admits that Paragraph
`29 and footnote 19 purport to characterize a third-party website, which speaks for itself. Apple
`denies the remaining allegations in Paragraph 29 and footnotes 18 and 19.
`30.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 30 and, on that basis, denies them.
`
`APPLE INC.’S ANSWER TO SECOND
`AMENDED CLASS ACTION
`COMPLAINT: 2:22-cv-01599 KKE
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`Apple lacks knowledge or information sufficient to form a belief as to the truth
`31.
`of the allegations in Paragraph 31 regarding profit margins and, on that basis, denies them.
`Apple denies the remaining allegations in Paragraph 31.
`32.
`In response to Paragraph 32, Apple admits that the French competition authority
`assessed a 1.1 billion euro fine, which was later reduced to 372 million euro. Apple admits that
`Paragraph 32 and footnote 20 purport to characterize a third-party website, which speaks for
`itself. Apple admits that Paragraph 32 and footnote 21 selectively quotes from and characterizes
`a French Court of Appeals decision, which speaks for itself. Apple denies the remaining
`allegations in Paragraph 32 and footnotes 20 and 21.
`33.
`Paragraph 33 contains Plaintiffs’ characterization of their claim to which no
`response is required. To the extent a response is required, Apple denies the allegations of
`Paragraph 33. Apple denies the remaining allegations in Paragraph 33.
`34.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 34 regarding Amazon and, on that basis, denies them. Apple
`admits that Paragraph 34 and footnotes 23, 24, and 26 purport to characterize a House Report,
`which speaks for itself. Apple admits that Paragraph 34 and footnote 25 purport to characterize
`a third-party website, which speaks for itself. Apple denies the remaining allegations in
`Paragraph 34 and footnotes 23, 24, 25, and 26.
`35.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 35 regarding Amazon and, on that basis, denies them. Apple
`admits that Paragraph 35 and footnote 27 purport to characterize an Amazon website, which
`speaks for itself. Apple admits that Paragraph 35 and footnotes 28 and 29 purport to characterize
`a House Report, which speaks for itself. Apple admits that Paragraph 35 and footnote 30 purport
`to characterize a third-party website, which speaks for itself. Apple denies the remaining
`allegations in Paragraph 325 and footnotes 27, 28, 29 and 30.
`36.
`Apple admits that Paragraph 36 and footnote 31 purport to characterize a third-
`party website, which speaks for itself. Apple lacks knowledge or information sufficient to form
`
`APPLE INC.’S ANSWER TO SECOND
`AMENDED CLASS ACTION
`COMPLAINT: 2:22-cv-01599 KKE
`
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`ORRICK, HERRINGTON & SUTCLIFFE LLP
`401 Union Street, Suite 3300
` Seattle, Washington 98101
`+1 206 839 4300
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`Case 2:22-cv-01599-KKE Document 110 Filed 05/21/24 Page 12 of 34
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`a belief as to the truth of the allegations in Paragraph 36 and footnote 31 regarding Amazon and,
`on that basis, denies them. Apple admits that Paragraph 36 and footnote 32 purport to
`characterize a third-party website, which speaks for itself. Apple denies the remaining
`allegations in Paragraph 36 and footnotes 31 and 32.
`37.
`Apple admits that Paragraph 37 and footnote 33 purport to characterize a
`Shareholder Letter, which speaks for itself. Apple admits that Paragraph 37 and footnote 34
`purport to characterize a third-party website, which speaks for itself. Apple lacks knowledge or
`information sufficient to form a belief as to the truth of the remaining allegations in Paragraph
`37 and footnotes 33 and 34 and, on that basis, denies them. Apple lacks knowledge or
`information sufficient to form a belief as to the accuracy of the figure below Paragraph 37 and,
`on that basis, denies it.
`38.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 38 regarding Amazon and, on that basis, denies them. Apple
`admits that Paragraph 38 and footnote 35 purport to characterize a House Report, which speaks
`for itself. Apple denies the remaining allegations in Paragraph 38 and footnote 35.
`39.
`Apple lacks knowledge or information sufficient to form a belief as to the truth
`of the allegations in Paragraph 39 regarding Amazon and, on that basis, denies them. Apple
`admits that Paragraph 39 and footnote 36 purport to characterize a House Report, which speaks
`for itself. Apple denies the remaining allegations in Paragraph 39 and footnote 36.
`40.
`In response to Paragraph 40, Apple admits that it competes through its retail and
`online stores against numerous other sellers and resellers of Apple’s own products and other
`consumer electronics products, including Amazon and other Apple resellers on Amazon
`Marketplace. Apple otherwise denies the remaining allegations in Paragraph 40.
`41.
`In response to Paragraph 41, Apple admits that Apple manufactures and markets
`smartphones, personal computers, tablets, wearables and accessories, and sells a variety of
`related services. Apple further admits that Amazon also manufactures and sells certain devices.
`Apple admits that it competes through its retail and online stores against numerous other sellers
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`APPLE INC.’S ANSWER TO SECOND
`AMENDED CLASS ACTION
`COMPLAINT: 2:22-cv-01599 KKE
`
`- 12 -
`
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`401 Union Street, Suite 3300
` Seattle, Washington 98101
`+1 206 839 4300
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`Case 2:22-cv-01599-KKE Document 110 Filed 05/21/24 Page 13 of 34
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`and resellers of Apple’s own products and other consumer electronics products, including
`Amazon and other Apple resellers on Amazon Marketplace. Apple lacks knowledge or
`information sufficient to form a belief as to the truth of the allegations in Paragraph 41 regarding
`Amazon’s motivation for developing certain products and, on that basis, denies them. Apple
`denies the remaining allegations in Paragraph 41.
`42.
`In response to Paragraph 42, Apple admits that there is both inter- and intra-brand
`competition for certain Apple products. Apple denies the remaining allegations in Paragraph
`42.
`
`In response to Paragraph 43, Apple admits that intra-brand competition for Apple
`43.
`products occurs across many levels, including “across a broader ecommerce landscape” and
`includes competition between third parties (including Amazon) and Apple. Apple denies the
`remaining allegations in Paragraph 43.
`44.
`Apple admits that it competes through its retail and online stores against
`numerous other sellers and resellers of its products and other consumer electronics products,
`including Amazon and other Apple resellers on Amazon Marketplace, but otherwise denies the
`allegations in Paragraph 44. Apple denies the allegations in footnote 37.
`45.
`In response to Paragraph 45, Apple admits that Amazon has been a reseller of
`certain Apple products since at least 2012. Apple admits that Paragraph 45 and footnote 38
`purport to quote from and characterize a since-vacated AGCM decision, which speaks for itself
`and has no current legal effect. Apple lacks knowledge or information sufficient to form a belief
`as to the truth of the allegations regarding the number of resellers of Apple p