Updates on Epic Games’ Antitrust Battle: Fight Over Witnesses and UK Expansion

Epic Games, Inc. v. Apple Inc.
Filed August 13, 2020
United States District Court for the Northern District of California
Case No. 3:20-cv-05640
AND
Epic Games, Inc. v. Google LLC
Filed August 13, 2020
United States District Court for the Northern District of California
Case No. 3:20-cv-05671

The United States District Court for the Northern District of California will hear Epic Games, Inc. v. Apple Inc. in an in person trial beginning on May 3rd. In its suit, which we previously covered here, Epic Games (“Epic”) alleges that Apple Inc. (“Apple”) violated antitrust law by requiring that developers only distribute iOS apps through Apple’s App Store and that developers use Apple’s In-App Purchase platform for all in-app purchases, for which it charges a 30% commission fee. Epic filed the lawsuit after its game Fortnite was removed from Apple’s App Store following the addition of an option to buy Fortnite’s in-game currency “vBucks” directly from Epic in order to circumvent the 30% commission that Apple charges developers. Epic is also suing Google LLC (“Google”) on similar grounds for its Google Play store practices, but a trial date has not yet been set.

The case against Apple is already heating up after Apple requested the judge block Epic from calling three witnesses it disclosed on March 12th, even though Apple waited until April 7th to raise the issue. Apple alleged that Epic violated Rule 26, which requires parties to disclose the identities of parties testifying in their defense. Judge Gonzalez Rogers denied Apple’s request for sanctions, noting that even if Epic had violated Rule 26, the appropriate remedy would have been giving Apple the opportunity to depose the witnesses, not to block them from testifying. The three witnesses at issue are Vivek Sharm, the Vice President of Facebook Gaming, Lori Wright of Microsoft, and Benjamin Simon of Yoga Buddhi Co. 

Judge Gonzalez Rogers also warned that “the failure to produce relevant documents, including documents relevant to the individual testifying witness, to both parties (here, to Apple) will be factored into the individual witness’ credibility, and, if necessary, may warrant the striking of testimony.” 

Epic is also taking its antitrust battle abroad. On February 22nd, the Competition and Appeal Tribunal in London said that Epic cannot bring competition claims against Apple because most of the alleged anti-competitive behavior occurred in the United States. However, Epic may bring competition claims in a United Kingdom court against Google’s parent company, Alphabet Inc., because it has subsidiaries in Ireland that may have committed competition violations. The London judge only allowed claims alleging that the Google Play store’s developer distribution agreement violates U.K. laws against anti-competitive agreements and abuse of a dominant position, and rejected claims about Google’s mobile app distribution agreement and technical restrictions placed on apps. 

On March 30th, Epic instead filed a complaint with the U.K.’s Competition and Markets Authority (“CMA”) supporting the CMA’s existing investigation into Apple’s rules regarding app distribution on the App Store and mandatory in-app purchase system. Spotify prompted that investigation with its complaint alleging that Apple gives itself an unfair advantage with those rules. 

Apple is also under investigation by the EU’s European Commission for possible antitrust violations for its distribution rules, mandatory in-app purchase system, and Apple Pay policies. 

These lawsuits are ongoing, and we will provide updates on interesting developments over the course of the litigation.