There are no signs of a détente between Fortnite maker Epic Games and Apple. While Apple apparently keeps the door open to whatever version of Fortnite that would bring the battle royale game back into compliance with the App Store terms, Epic is not only being very vocal in public and running an anti-Apple tournament but also pursuing a litigation strategy that appears to be all about escalation, trying to take the merits of a huge antitrust case to the United States Court of Appeals for the Ninth Circuit in the coming months.
Notwithstanding the extremely acrimonious nature of this litigation, there's one remark that Judge Yvonne Gonzalez Rogers made in last month's hearing on Epic's motion for a temporary restraining order (TRO) that neither party is comfortable with. When counsel for Epic insisted on their likelihood to prevail on the merits (while the court placed the emphasis at the TRO stage on irreparable harm), Judge Gonzalez Rogers said this case was not going to be a "slam dunk" for either Epic or Apple, and reminded everyone that the Supreme Court's Pepper v. Apple vote--which ultimately allowed a consumer class action (seeking damages for allegedly having overpaid for app downloads and in-app purhcases) to go forward before her court--was very close: 5-4.
Representing Epic, Cravath's Gary Bornstein distinguished Pepper from Epic a few minutes later. He noted that Epic is an app developer bringing antitrust claims against Apple over its App Store terms, while the Pepper class action complaint is about harm to consumers from what Apple withholds from app developers, and the Supreme Court ruled on whether or not that consumer class could sue for damages (with Epic not even seeking damages for now).
After the reply brief Epic filed on Friday, it's beyond doubt that Epic's lawyers are not going to accept the notion that the outcome of their case would be hard to predict. If the district court doesn't agree, they'll try the same before the Ninth Circuit. Even though the Pepper decision on standing went against Apple, the closeness of the Pepper v. Apple vote appeared to dissuade Judge Gonzalez Rogers from considering Epic v. Apple a case over a clear antitrust violation.
Interestingly, Apple's lawyers made pretty much the same points in footnote 15 of their opposition (filed on Tuesday) to Epic's motion for a preliminary injunction, undoubtedly in light of Judge Gonzalez Roger's mentioning of that decision in the late-August TRO hearing:
"The 5-4 decision in Apple Inc. v. Pepper [...] addressed the 'sole question presented at th[at] early stage of the case,' namely, whether iPhone users who purchased apps from the App Store were 'direct' purchasers with standing to sue. The Court expressly did 'not assess the merits of the plaintiffs' antitrust claims against Apple' or 'consider any other defenses Apple might have.'"
At the preliminary injunction stage, the closeness of that vote wouldn't be a problem for Apple, which has a strong argument that the removal of Fortnite from the App Store is simply Epic's self-inflicted harm, that there's just one Epic corporate group and not two independent Epics, and that Apple isn't engaging in retaliation against Epic but simply acting consistently with what it did in thousands of other cases. Ppresumably, Apple's concern is that in light of what Judge Gonzalez Rogers said in the TRO hearing, she might be influenced in her thinking by the notion that the Supreme Court decided, albeit with a 5-4 vote, against Apple.
What Apple and Epic agree upon here is simply correct. Pepper has no bearing on Epic, not by any stretch of the imagination. If the Supreme Court's Pepper decision had addressed at least one of the key questions concerning the underlying merits, then the closeness of the vote might be an indication. But the Pepper standing question was about the nature of the business relationship betweeen iPhone users and Apple when they pay for downloads from the App Store or for in-app purchases.
Only at a stratospheric level of abstraction could one see a parallel here: the standing issue in Pepper was a question of first impression, attributable to the fact that app stores are a rather young phenomenon, and--though counsel for Epic as well as for Apple would almost certainly disagree for reasons that couldn't be more disparate--there may be close questions of first impression in Epic v. Apple, too.
By the way, the late Justice Ruth Bader Ginsburg was among the 5-judge majority that ruled in favor of the Pepper consumer class.
Epic v. Apple, too, has the potential to go all the way up to the Supreme Court, but not over the question of standing.
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