Epic Games says court got App Store ruling wrong in opening appeal filing

Epic Games has this week filed the first opening brief in its appeal against the ruling passed down by a court in the Apple vs Epic Games trial last year.

In its opening filing Epic Games told the appeal court that while “apps bring the iPhone to life” and the success of the iPhone (which it says may be the most profitable technology ever) depends on apps, they live under a “dark cloud” because of Apple’s exclusive distribution and restrictions on alternative app stores and in-payment solutions.

Lawyers for Epic seeking to have the ruling against the company from last year vacated say the court erred in four main areas.

Firstly, they say that the court was wrong to conclude that a “contract of adhesion” between Apple and developers that stops them from opening competing app stores and payment solutions were not contracts under Section 1, arguing that a contract is still a contract even if it is “imposed by one party with overwhelming market power.”

Secondly, lawyers for Epic state that the court erred in stating Apple’s conduct “survives rule of reason scrutiny”, and that the court found practices that caused great harm to competition, innovation, and consumers yielding “extraordinarily high” supracompetitive profits, and that Apple had much less restrictive alternatives on Mac.

“Inexplicably, the district court ignored its factual findings and failed to conduct the required balancing of competitive harms with any valid competitive benefits. That balancing demonstrates that Apple’s restrictions violate the Sherman Act.”

Thirdly, the filing states that Apple does have a monopoly on the iOs app distribution and payment market and that the court was wrong not to find that an antitrust market may be defined by a single brand. Finally, it states the court was wrong to reject claims that Apple unlawfully ties its App Store to in-app payments, and that it wrongly concluded they were a single product.

In a previous statement hailing its victory against Epic, Apple stated:

“Today the Court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law. As the Court recognized ‘success is not illegal.’ Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world. We remain committed to ensuring the App Store is a safe and trusted marketplace that supports a thriving developer community and more than 2.1 million U.S. jobs, and where the rules apply equally to everyone.”