Three weeks ago, Epic Games and Match Group (the operator of Tinder and other dating services) put forward amended complaints that allege a per se antitrust violation consisting in Google's agreements under which it paid hundreds of millions of dollars to game makers like Activision Blizzard King in order to ensure their loyalty to the Google Play Store. In that case, the legal analysis would be streamlined: Google couldn't proffer procompetitive justifications, and the court wouldn't have to engage in a rule-of-reason balancing.
A week later, Google opposed the motion to amend Epic's and Match's complaints. A few hours ago, Epic and Match responded to Google's opposition:
Epic Games, Inc.'s and Match Group, LLC et al.'s Reply in Support of Motion to Amend Complaints
The dispute over the motion to amend the complaints has three parts:
Google claims to be prejudiced because it didn't know during discovery that it would later have to defend against an allegation of a per se violation. "Project Hug" was already addressed in Epic's first amended complaint last year, but not as a per se violation. Now, Epic and Match argue that there cannot be prejudice given that "the per se claims are even simpler, requiring less factual development than a rule of reason claim."
I can see two potential issues. First, Google may argue that the questions on which a per se claim turns are not a true subset of those of a rule-of-reason claim. Second, even if they were, Google had time limits during those depositions and might have set different priorities.
While I think Epic and Match should be allowed to amend their complaints, I've said before that maybe some limited additional discovery should be granted to Google.
As for the delay that Google alleged, Epic and Match want to refocus the discussion: their proposed amended complaints "were filed over eight months before trial, leaving ample time and opportunity for Google to defend against them." Also, "Match just entered the case in May and did not gain access to Google’s materials until almost two months later." Google may still have an argument that Epic could have brought the amendment sooner, but normally such amendments are allowed and "[d]elay alone is not a sufficient basis to deny" such a motion. It just takes a showing of "good cause"--which is a bit of a hurdle, but not a sky-high one.
Epic and Match reject Google's assertion that the per se claims are futile. They say that there are factual issues involved that need to go to trial, and given that a motion to dismiss would be premature, an opposition to a motion to amend the complaints can't succeed either.
Unless Judge James Donato reschedules the hearing or decides to just take the matter under submission (i.e., if he rules without a hearing), there will be a motion hearing in San Francisco on November 17.
While it's not likely to be outcome-determinative, I agree with footnote 7, which explains why it's "off the point" to compare "Project Hug" to Epic's exclusivity agreements for certain game titles to be offered (for certain periods) only by the Epic Games Store. The Epic Games Store runs on platforms where there are no limits on game distribution. The question on those platforms (such as Windows) is not whether game developers set up their own store or promote "sideloading" (direct downloads).
Finally, Epic and Match respond to Apple's "vertical" argument (that game makers provide an input to the Google Play Store as opposed to being horizontal competitors) with what I expected. In my commentary on Google's opposition brief I noted that it doesn't matter whether a (potential) horizontal competitor also has a vertical relationship with the defendant. Epic and Match give the following example: "[I]t would be just as unlawful for Intel to agree with a competing chip supplier like AMD not to compete in the supply of a certain type of chip as it would be for Intel to agree with a customer like Dell or Acer not to compete in the supply of that chip."
