Apple fails to fend off mobile tracking lawsuit

Apple Inc must defend against a lawsuit accusing it of letting advertisers secretly track the activity of millions of mobile device users, a federal judge ruled, but Google Inc and several other defendants were dismissed from the case.

Owners of iPhones, iPads and iPod Touches may pursue claims against Apple under two California consumer protection laws, U.S. District Judge Lucy Koh in San Jose, California, said in a decision late Tuesday. Koh oversees nationwide litigation combining 19 lawsuits.

But the judge threw out claims that Apple violated customers' privacy rights, and also threw out claims under federal laws addressing computer fraud, wiretaps, and records disclosure.

Lawyers for the plaintiffs, Apple and Google did not immediately respond to requests for comment.

Other defendants dismissed from the case include AdMarval Inc, Admob Inc, Flurry Inc and Medialets Inc.

The lawsuit followed an April 2011 presentation from two computer programmers whose research showed that iPhone users' movements were being monitored through their devices.

That provoked a firestorm in which regulators demanded changes, which Apple promised to make. Steve Jobs denied in multiple interviews at the time that the company he co-founded ever tracked or would ever track customer movements.

In their lawsuit, the plaintiffs said Apple designed its devices to let mobile advertising and analytics companies, such as Google and its co-defendants, collect personal data when free apps are downloaded, including from Apple's website.

They said this was done without permission, and inconsistent with Apple's proclaiming in writing that it would take steps to safeguard personal information against misuse.

Among the data gathered were addresses, genders, ages, identifiers assigned to devices, and functions performed on particular apps. Some device owners said that Apple collected data about their precise whereabouts at a given moment.

Judge Koh said the plaintiffs may pursue claims that Apple caused them to overpay for their devices.

She said this was based on the company's statements concerning privacy protection, and the consumption through the defendants' actions of finite bandwidth and storage space.

While Apple claimed that user agreements shielded it from liability, Koh said there was "some ambiguity" as to whether all the information that was collected was permitted.

But in striking down the privacy claims under California's state constitution, Koh said the supposed invasion in this case was not an "egregious breach of social norms" and might even be deemed "routine commercial behavior."

Koh had dismissed an earlier version of the plaintiffs' lawsuit in September 2011, but gave the plaintiffs a chance to try again. Tuesday's decision is based on an amended complaint.

Apple is based in Cupertino, California, and Google in Mountain View, California.

The case is In re: iPhone Application Litigation, U.S. District Court, Northern District of California, No. 11-02250.

Copyright Thomson Reuters 2012