By Juli Clover, MacRumors & WRAL TechWire
Epic Games on Wednesday filed a petition for a writ of certiorari with the Supreme Court, which basically means the company is asking the Supreme Court to make a ruling in its ongoing legal battle with Apple.
The Supreme Court is the last stop for Epic Games after it lost an appeal earlier this year. The Ninth Circuit Court of Appeals in April 2023 sided with the lower court and ruled that Apple’s App Store rules do not violate antitrust law by not allowing for third-party marketplaces.
In an email, Epic Games cited what it calls “key excerpts” in the case:
- This Court should grant certiorari [a writ or order by which a higher court reviews a decision of a lower court. – Oxford Dictionary] to decide both Questions Presented. First, the ruling below conflicts with the holding of this Court and other circuits that a “less- restrictive alternative” is one that achieves the restraint’s pro-competitive effects while causing less harm; the fact that it imposes some cost is not disqualifying. Part I, infra. Second, the ruling below conflicts with the holding of this Court and other circuits that the ultimate inquiry under the Rule of Reason is whether the restraint is anti-competitive on balance.
- Epic appealed, supported in substance by numerous amicus briefs, including from the United States Government, a coalition of thirty-five states, and leading antitrust scholars. The Ninth Circuit affirmed in relevant part, however, by a divided vote.
- The panel unanimously held that the district court had “erred as a matter of law on several issues,” Pet. App. 21a, but the majority deemed all those errors “harmless,” id. at 22a, 38a, 40a-41a, 43a, 66a, 69a-70a. The Ninth Circuit first agreed that Epic had proved that Apple’s practices directly cause enormous anti- competitive harms. Pet. App. 45a-49a. Apple thus extracts many billions of dollars in “supracompetitive commissions”; and by “foreclos[ing] would-be competitors” from offering other app stores and payment providers, it “reduc[es] innovation” and “quality.” Id. at 45a-46a.
- At step three, the majority narrowed the case significantly by rejecting the district court’s reliance on the principal pro-competitive interest asserted by Apple: differentiating its product as providing greater privacy and security. The court agreed that it would be a less-restrictive alternative to prohibiting all competing app stores for Apple to continue to review all applications for privacy and security issues both electronically and with human review (as it does today), but then allow the reviewed applications to be distributed through third-party alternatives. Pet. App. 63a-64a
- Judge Thomas dissented on several grounds. He agreed with the majority that the district court committed serious legal errors. Pet. App. 92a. But unlike the majority, he “would reverse the district court and remand to evaluate the claims under the correct legal standard.” Ibid. According to Judge Thomas, the majority’s application of the Rule of Reason, despite rejecting fundamental aspects of the district court’s decision, “amounts to appellate court fact-finding.” Id. at 94a. Further, because the district court expressly “did not undertake” a balancing inquiry, Judge Thomas concluded that “[r]emand for a formal balancing should be required.” Id. at 95a. (Page 10)
