Thursday, March 23, 2023

Another digital "buy" button case survives motion to dismiss

McTyere v. Apple, Inc, 2023 WL 2585888, No. 21-CV-1133-LJV (W.D.N.Y. Mar. 21, 2023)

Plaintiffs alleged that Apple made false representations when it “sold” them digital content on the iTunes Store only to later remove their access to that same digital content. They claimed violation of sections 349 and 350 of the New York General Business Law, as well as unjust enrichment. Consumers can “rent” movies from Apple on the iTunes Store for about $5.99, but the “buy” option costs much more. “Regardless of which device is used to access digital content, or which ‘iTunes’ app is used to buy or rent the digital content, the app provides a tab or folder labeled ‘purchased.’ ” But when third parties terminate their licensing agreements with Apple, Apple “must revoke [a] consumer[’s] access” to purchased digital content “without warning.” Plaintiffs alleged that if they had known about the possibility that Apple might later revoke access to already-purchased content, “they would not have bought [ ] digital content from [Apple] or would have paid substantially less for it.”

Apple was not collaterally estopped from raising arguments against liability that were rejected in Andino v. Apple, Inc., 2021 WL 1549667 (E.D. Cal. Apr. 20, 2021), given that the claims arose under “completely different state laws.”

Apple argued that it wasn’t misleading to say “buy,” because to “buy” something means to “acquire possession, ownership, or rights to the use or services of by payment especially of money.” Apple argued that plaintiffs in fact received the “right to the use of” the digital content at issue here, so its advertising was not misleading regardless of whether their ability to access that digital content later disappeared.

But that “right to use” argument cannot carry the water that Apple asks it to carry. The right to use something may last but a moment or forever. And by ignoring that issue, Apple’s argument begs the question.

Take, for example, two consumers who each pay $19.99 to “buy” two different movies on the iTunes Store, each planning to watch the movie the next night. The following night, the first streams his movie purchase without a hitch. But when the second sits down on the couch and opens the iTunes Store, she finds that the movie has disappeared from her “purchased” folder. As it turns out, Apple lost the rights to that movie minutes before. Both consumers had the “right to the use of” their movie purchases for the twenty-some hours between the time they purchased them and the time they sat down to watch them. But the second would-be movie watcher understandably might feel a little miffed if she were told that she received exactly what she paid for.

In a footnote, the court noted that Apple’s argument would mean that both the consumer who “rented” the movie and the one who “bought” it would receive the “right to the use of” that digital movie. Someone who plans to rewatch a movie might not pay the enhanced price to “buy,” and just rent instead, if they know that “buying” is no guarantee of continued access.

Thus, “reasonable consumers might have been misled when they purchased digital content with the mistaken impression that the content could not later be removed from their libraries.”

Apple also argued that its iTunes Store terms and conditions alerted the plaintiffs (and other consumers) to the possibility that they might lose access to purchased digital content and should download digital content to prevent that possibility. The parties disputed whether Apple’s terms and conditions were equivalent to front-of-package clarifications, which was a factual issue. Also, it wasn’t clear that the T&C were sufficient. The earliest applicable terms and conditions that Apple has submitted warn consumers only that “Apple and its licensors reserve the right to change, suspend, remove, or disable access to any iTunes products, content, or other materials comprising a part of the iTunes service at any time without notice.” A reasonable consumer “might read those terms and conditions and nevertheless believe that once he or she has ‘purchased’ digital content and that content is saved to his or her ‘purchased’ folder, Apple cannot at that point suspend or terminate access to it, notwithstanding whether it otherwise could do so to other material in the iTunes Store before purchase.”

Apple argued that the plaintiffs were warned to download digital content “to ensure continued access to it”; once consumers download content, Apple said, they can in fact continue to stream that content even if Apple terminates its licensing agreement with another party. But the plaintiffs argued that not all content can be downloaded and that the “right to download” does not fully protect against the possibility that a consumer will lose access to digital content. This couldn’t be resolved on a motion to dismiss.

Although the unjust enrichment claim could ultimately be deemed duplicative of the other theories of recovery, the court also declined to dismiss it at this stage.

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