Epic demands judge ‘order relief’ in its continuing antitrust battle with Apple

CARY – Epic Games makes clear its demands in a continuing battle with Apple over tyhe tech giant’s ban of Fortnite from its app store in a fight over fees: “The Court should order the relief Epic requested in its opening brief.”

That brief sentence is part of a concluding paragraph in Epic’s 136-page filing made Wednesday – the second made as Apple and Epic continue their legal battle in a California court.

As reported by MacRumors, Epic reiterated claims from an earlier appeal that the judge in the case had made “multiple legal errors.”

The appeal came even as Apple moved on a variety of fronts to return Fortnite to Apple devices as well as to Google, which it also has sued over a Fortnite ban.

Epic keeps fighting Apple, says judge in anitrust case made ‘multiple legal errors’

In a summary of what it considers key points made in the new appeal, Epic provided WRAL TechWire with the following excerpts:

Epic’s opening brief explained why these findings cannot be squared with the court’s legal conclusion that Apple’s conduct comports with the Sherman Act. Unable to defend this fundamental inconsistency, Apple waves away the findings as “out-of-context” and seeks cover behind the “clear error” standard of review for factual findings. This is a red herring: as Epic made clear in its opening brief, while it does not agree with all of the district court’s factual findings, Epic’s appeal raises only questions of law. (Page 1)
The district court, led astray on many points by Apple, reached the wrong answer to all of these questions, and Epic, along with the United States, the Attorneys General of 34 States and the District of Columbia, leading antitrust scholars, and other amici curiae, explained the multiple legal errors plaguing the decision below. But Apple barely engages with any of these legal issues in its response, instead employing diversion. (Page 2)
Apple also asserts that the relief Epic seeks will compromise the security of the iPhone. But that is untrue. The operating system Apple uses in its Mac computers (“macOS”) does not include the challenged restraints found in the iPhone operating system (“iOS”), and Apple consistently touts the Mac’s security. Apple also permits multiple alternative payment solutions in the App Store for apps selling physical goods, confirming that the requirement to use Apple’s in-app payment solution, IAP, for digital goods serves no procompetitive goal. If Epic prevails, the App Store would not be dismantled. No customer would ever be required to use any of the things Apple complains about—an alternative app store, direct downloads for app distribution, or an alternative payment solution. The difference is that Apple would have to compete for its customers. (Pages 2-3)
The court found substantial anticompetitive effects but erroneously credited justifications that do not advance competition and ignored its own factual findings establishing less restrictive alternatives. In trying to defend the court’s multiple legal errors, Apple seeks to change the law and erase the rule of reason’s balancing requirement. But allowing a scant procompetitive justification to immunize restraints with major anticompetitive effects would flout decades of antitrust jurisprudence. (Pages 5-6)
Apple asserts its commission was not supracompetitive “when set” (Apple Br.69), but the district court found that contemporaneous documents proved “Apple did not consider the rate to be sustainable at that time and questioned whether ‘enough challenge from another platform or web based solutions’ will cause it to adjust,” 1-ER-100 n.483 (quoting FER-251); 1-ER-95 n.459. Apple “set the rate . . . without considering costs” or “the value of its intellectual property rights,” and “was at least partly protected by the iPhone’s ‘newness.’” 1-ER-100 n.483; 1-ER-117. (Page 28)
“[B]ecause “[t]he antitrust laws assume that ‘competition will produce not only lower prices, but also better goods and services.’” PLS.com, 32 F.4th at 836 (quoting Pro. Eng’rs, 435 U.S. at 695); Freeman, 322 F.3d at 1152. Thus, competition, not Apple’s restrictions, will ensure the highest quality app stores. (See EFF Br. 14-20 (noting potential risks created by a “security monoculture”).) (Page 33)
But although Apple is entitled to some compensation for use of its intellectual property to incent innovation, it may not impose anticompetitive restraints to achieve that end; “[a]ntitrust law presumes that competitive markets offer sufficient incentives and resources for innovation.” Freeman, 322 F.3d at 1152 (emphasis added). (Page 34-35)
Apple ignores the district court’s factual findings on the security of the Mac notarization model (Epic’s proposed less restrictive alternative to Apple’s iOS restraints), 1-ER-114–16, citing only to the court’s legal conclusions, mislabeling them “factual findings,” and relying on uncredited testimony from its own witnesses. (Apple Br. 81.) Apple claims the court “credited Apple’s ‘compelling explanation’ that ‘Mac computers have more malware’” (Apple Br. 82 (quoting 1-ER-149)), but the court actually found that Apple’s witness on this subject was “stretching the truth for the sake of the argument” when he disparaged macOS as having a “malware problem.” 1-ER-116 (finding this claim “appear[s] to have emerged for the first time at trial”). Indeed, Apple itself proudly touts the macOS notarization model as allowing “apps from both the App Store and the internet [to] be installed worry-free”. (Page 39-40)