Epic Games Makes Final Push for Reversal in Antitrust Appeal Against Apple

Video game company Epic Games pressed the Ninth Circuit to consider issues of law it claims the trial court decided incorrectly in a reply brief filed on Wednesday. The submission comes as part of Epic’s crusade to be allowed to sell iOS apps outside of the Apple App Store or at least offer its customers in-app payment options aside from Apple’s proprietary billing system.

The ongoing saga initiated by Epic Games boils down to its allegation that Apple maintains monopolistic control over the distribution of iPhone apps and in-app purchases of digital content. Among other holdings, the trial court ruled Apple was not a monopolist based on the evidence Epic presented during the May 2021 bench trial.

On appeal, Epic’s opening brief sought to explain why the district court’s extensive factual findings did not square with the law. Amici including the federal government, Microsoft and other app developers also chimed in on this front.

In opposition, Apple urged that the lower court’s decision was by-and-large correct. The defendant further criticized Epic’s appeal for selectively choosing excerpts of the decision to support its argument, ignoring the differential legal standard the Ninth Circuit must adhere to and waging a worldwide smear campaign against Apple to get its way.

In this week’s brief, Epic focuses not only on the points of law it claims the district court ruled incorrectly on, “led astray … by Apple,” but also why it is possible for a third-party app store to exist. Over Apple’s arguments that the relief Epic advocates for will compromise iPhone security, Epic says that the operating system used in Mac computers lacks the challenged restraints the iPhone operating system has, yet Apple still touts Mac OS’s security.

In addition, Epic says Apple allows multiple payment systems in its app store for selling physical goods, “confirming that the requirement to use Apple’s in-app payment solution, IAP, for digital goods serves no procompetitive goal.” The difference, were Epic granted permission to use alternate distribution and payment systems, is that Apple would have to compete for customers, the filing says.

The brief also dedicates page space to explaining why the district court correctly struck down Apple’s anti-steering provisions, a decision that the Ninth Circuit has already expressed skepticism towards. Over the district court’s refusal, an appellate panel stayed the mandate questioning how the court could have found a violation of California’s antitrust law without finding a federal one.

Faegre Drinker Biddle & Reath LLP and Cravath, Swaine & Moore are counsel for Epic Games, while Gibson, Dunn & Crutcher LLP is counsel for Apple.