Epic Lost Trial Due to Flawed Argument, Not Legal Error, Apple Says in Appeals Filing
Apple's legal battle with Epic Games is continuing on, and today, the Cupertino company filed an opening brief with the United States Court of Appeals for the Ninth Circuit. Both Apple and Epic Games opted to appeal the original ruling in the Epic Games v. Apple case as neither company was satisfied with the outcome. Epic lost, while Apple was subject to App Store changes that are on hold pending the outcome of the appeal.
Following Epic's initial opening brief in January, Apple submitted its latest filing to the appeals court this afternoon. In the brief, Apple argues that Epic Games lost the case not because of legal error, but because of its "unprecedented" and "unfounded" accusations of anticompetitive conduct. Apple quotes several passages from the initial ruling that point out Epic's failings.
Epic built its case on witnesses who "lack[ed] credibility" and were "unreliable," whose testimony was "wholly lacking in an evidentiary basis," and who were "willing to stretch the truth in support of [Epic's] desired outcome." At trial, its theories were revealed to be "artificial," "misconceived," and "litigation driven." At every turn, Epic "failed to demonstrate," "failed to convince," "failed to produce," "failed to present," "failed to show," "failed to persuade," and "failed to prove" the facts of its case.
Apple argues that Epic is using the appeal to try to "change the narrative" because it can show no error in the district court's original ruling. To win its appeal, Epic needs to prove without a doubt that the first court's findings were erroneous, and Apple does not believe that's going to happen.
According to Apple, Epic made far-reaching claims at the edges of antitrust law that were unsuccessful, and there is no basis for the initial ruling to be overturned on appeal. Apple also claims that Epic lacks standing to make further arguments about the App Store because it is no longer an iOS developer, as the Epic Games developer account has been terminated.
Epic had the burden to prove, among other things, that the challenged limitations were unreasonable restraints of trade under a framework the parties agreed on before trial began. After a 16-day bench trial, the district court found that Epic had failed to carry its burden of proof on every one of its antitrust claims. That should not surprise: Throughout the history of the App Store, it is undisputed that prices have only gone down, while output has exploded. Those are the hallmarks of competition, not monopolization. To reverse, this Court would have to depart from settled law and ignore the district court's detailed findings of fact.
Several state attorneys general joined together to file an amicus brief to support Epic Games, and Apple claims this was done to "make it easier for them to win antitrust lawsuits." Microsoft also supported Epic Games, and according to Apple, Microsoft is simply "pursuing a self-interested business strategy of distinguishing itself from other platforms even while making 'hundreds of millions of dollars' from its partnership with Epic."
The original ruling determined that Apple's anti-steering provisions preventing developers from linking to outside payment methods were unfair under the California Unfair Competition Law, leading the judge to order Apple to make changes to the App Store to allow developers to use outside payment methods. Apple's filing addresses this aspect of the appeal, with Apple claiming that the initial court made an error in the ruling.
"The UCL injunction cannot stand," Apple writes. Apple's main claim is that because it was not found to be engaging in anticompetitive behavior, the App Store rules are also not unfair under the California law, which the appeals court has upheld before. Apple also says that the district court does not have the authority to levy such an injunction.
The injunction exceeds the district court’s authority. Epic failed to prove irreparable injury to itself. Moreover, this is not a class action, and any injunctive relief must be limited to Epic as a matter of both state and federal law.
Apple says that its own cross-appeal focuses on purely legal issues, unlike Epic's appeal, which is asking the court to second guess factual findings from the original trial and change the law. Apple's full opening brief can be read over on Scribd for those interested.
Following Apple's first appeals filing, amicus briefs in support of Apple will be submitted in the near future. From there, additional briefs will be submitted by Apple and Epic before the court will set a date to hear arguments. Given the timeline, Apple expects a decision to come by summer 2023 at the earliest.
Apple has made it clear that it has no intention of considering reinstating the Epic Games developer account until the legal battle has been settled, so Fortnite will not be returning to the App Store anytime soon.