The Attorney General's New Frontier: Attorney General Gali Baharav-Miara today submitted her position to the District Court in a class action lawsuit filed against Apple Inc., according to which the choice of law clause, which is under California law and not Israel, discriminates against Apple customers who consume its services in Israel.
According to the Attorney General, this position is based on the fact that a global corporation, such as Apple, which conducts business activity in Israel and directs its activity to Israel, should not be allowed to completely evade the application of Israeli law in its relations with consumers who consume its services or products, by means of a choice of law clause in a standard contract. Therefore, it is necessary to order the cancellation of the choice of law clause.
Depriving users in Israel? Apple Offices,
Apple is a hardware and software development corporation, the rights holder and developer of the App Store, which according to the class action lawsuit, is an exclusive way to download and distribute applications to iOS-based devices. The Attorney General's position focused primarily on the stipulation in Apple's terms of engagement that the law that would apply to the parties in litigation was the law of the State of California. In addition, the Attorney General also addressed (within the framework of the position) issues from the world of competition law that arise in relation to Apple's activity.
The position is based, inter alia, on the ruling of the Supreme Court in the Troim Miller case, according to which the starting point is that the State of Israel cannot lend a hand to the "outsourcing" of consumer contract laws applicable in the country. It was also determined in the Troim Miller case that the State of Israel will not provide the power of choice in this matter to global corporations that will determine which foreign law will apply to consumer transactions conducted in practice in Israel. In addition, it was argued that a wealthy global company, which conducts business on a considerable scale with Israel and directs its activities to Israeli customers, should and can be prepared to litigate according to the laws of the State of Israel, and the clear power gaps between the parties must be taken into account.
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Based on these and other considerations, the Attorney General believes that in certain circumstances that exist in the matter at hand, such a choice of law clause may be considered discriminatory, even without proving that foreign law denies rights or remedies due to the client. On the question of the relationship between the choice of law clause and the Competition Law, the conclusion is that the choice of law clause, in the present circumstances, cannot prevail over the provisions of the Competition Law, which cannot be stipulated. In addition, the Attorney General was required as part of her position on issues from the world of competition law, in relation to Apple's activity.
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