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Apple Abused Market Power in Cardio Device Market, Suit Alleges

AliveCor, a leading innovator in FDA-cleared personal electrocardiogram (ECG) technology and services, filed a federal antitrust lawsuit against Apple over its exclusion of other heartrate analysis providers from the Apple Watch. Apple’s monopolistic conduct harmed not only AliveCor but also patients and consumers, the suit alleges.

Filed in the Northern District of California, the suit comes on the heels of multiple patent infringement actions alleging that Apple stole AliveCor’s cardiological detection and analysis technology. Today’s suit seeks damages and an injunction requiring Apple to cease its abusive conduct.

“AliveCor developed the world’s first personal ECG and seeks to become the 24/7 virtual cardiologist for patients,” said AliveCor CEO Priya Abani. “Apple’s tactics in the heartrate analysis market, have injured competition, reduced consumer choice, and potentially damaged public health.”

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In 2015, AliveCor released KardiaBand, the first FDA-cleared accessory for Apple Watch, as well as SmartRhythm, a first-of-its-kind app that remains best in class. SmartRhythm used data from the Apple Watch’s heartrate algorithm to detect when a user’s heartrate was likely irregular and suggested that the user take an ECG.

The suit alleges, seeing the success of AliveCor’s products, Apple copied its technology then changed the “watchOS” operating system to sabotage it as well as other competing apps.

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“Medical advances depend on innovation. I knew smartwatches had enormous potential to help patients by monitoring a person’s heart for potentially life-threatening conditions,” said Dr. David E. Albert, a physician, inventor, and entrepreneur who is AliveCor’s Founder and Chief Medical Officer. “With the increasing importance of wearable medical technology, patients and customers need the best products at the lowest price. Apple’s actions deprive them of both.”

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The lawsuit details how, after Apple learned the value of heartrate monitoring and analysis on smartwatches from AliveCor, Apple did what it has done many times in other markets: It refused to accept competition on the merits. Once AliveCor started selling KardiaBand and its apps, Apple began a concerted effort to corner the market for heartrate analysis on the Apple Watch because, as the lawsuit states, “the value of controlling such critical health data … was apparently too much of a temptation for Apple.”

When AliveCor first developed its offerings for the Apple Watch, Apple accepted SmartRhythm in the App Store without objection. But soon after, Apple suddenly claimed that the app “violated” unwritten App Store guidelines. When AliveCor pushed back, Apple responded by literally rewriting the rules. Nevertheless, AliveCor adapted SmartRhythm multiple times so that it met Apple’s ever-changing guidelines. Finally, Apple made changes to watchOS’s heartrate algorithm that ensured SmartRhythm and other competing apps would not work.

“To gain an unfair competitive edge, Apple put countless AliveCor users’ lives in danger,” the complaint states.

The lawsuit details how Apple has injured both AliveCor and competition through its unlawful, anticompetitive behavior in the market for watchOS heartrate analysis apps. It has done so by abusing its monopoly power in that market, as well as the power it holds in the U.S. market for ECG-capable smartwatches. Apple’s behavior has excluded competitors, reduced innovation, and raised prices for consumers.

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