Case 4:20-cv-05640-YGR Document 356 Filed 02/24/21 Page 1 of 6
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`Northern District of California
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`United States District Court
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`Case No. 11-cv-06714-YGR (TSH)
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`DISCOVERY ORDER
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`Re: Dkt. No. 413
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`Case No. 19-cv-03074-YGR (TSH)
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`Re: Dkt. No. 292
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`Case No. 20-cv-05640-YGR (TSH)
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`Re: Dkt. No. 346
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`IN RE APPLE IPHONE ANTITRUST
`LITIGATION
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`DONALD R. CAMERON, et al.,
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`Plaintiffs,
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`v.
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`APPLE INC.,
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`Defendant.
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`EPIC GAMES, INC.,
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`Plaintiff and Counter-
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`defendant,
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`v.
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`APPLE INC.,
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`Defendant and
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`Counterclaimant.
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`Valve is a privately held company that develops PC video games. It does not make or sell
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`phones, tablets, or video games for mobile devices. Valve also operates Steam, an online platform
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`that lets users purchase and play PC games on their laptops and desktops. Steam users cannot buy
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`Case 4:20-cv-05640-YGR Document 356 Filed 02/24/21 Page 2 of 6
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`or use mobile apps on Steam. More than 30,000 PC games are available on Steam, more than
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`99% of which were made by third parties other than Valve. One commentator has described
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`Steam as “an iOS App Store-like marketplace for PC games.” See Nick Statt, Epic vs. Steam: The
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`Console WarReimagined on the PC, The Verge (Apr. 16, 2019), https://bit.ly/3oM9uhT.
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`According to the same article, Valve charges a 30% commission on all sales. See id. Most of
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`those games can also be bought elsewhere, including directly from developers, from brick and
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`mortar retail, or on other PC game platforms.
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`Apple served a document subpoena on Valve and is now moving to compel on three
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`points. First, it moves to compel on RFP 2. Second, it moves to compel on RFP 32. Third, Apple
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`states that Valve made such substantial redactions to volume 5 of its document production that
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`most of the potentially responsive information was redacted out, and Apple requests that Valve be
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`ordered to remove the redactions. Valve briefs all three issues together, arguing that the requested
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`information is irrelevant, that collecting it is burdensome, and that Apple has not shown a
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`substantial need for this information. The Court held a hearing this morning, and now issues this
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`order.
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`RFP 2 asks for documents sufficient to show since 2008 Valve’s (a) total yearly sales from
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`apps and in-app purchases from Steam, (b) annual advertising revenue attributable to Steam, (c)
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`annual sales of external products attributable to Steam, (d) annual revenues from Steam, and (e)
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`annual earnings, income or profits from Steam. Apple asks for this information by app if that is
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`available. During meet and confer Apple limited the relevant time period to 2015 to the present.
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`RFP 32 asks for documents sufficient to show, for each month since 2010 for each app published
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`on Steam, (a) the name of the app, (b) the date range when the app was available on Steam, and (c)
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`the price of the app and any in-app product associated with the app on Steam. During meet and
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`confer, Apple limited this request to 436 specific apps that are available on both Steam and the
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`Epic Games Store and limited the date range to 2015 to the present.
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`The information Apple seeks is relevant and proportional to these three related actions.
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`First, the aggregate financial information sought by RFP 2 is relevant to market definition, which
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`is a major issue in dispute in this litigation. As Judge Gonzalez Rogers explained in her
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`preliminary injunction order in the Epic Games case, Plaintiffs are pushing for a narrowly defined
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`market that consists only of apps distributed on the iOS platform, whereas Apple is pushing for a
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`broadly defined video game market that includes distribution on other platforms, including the
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`Microsoft Xbox, Sony PlayStation 4, Nintendo Switch, computer platforms (Microsoft Windows
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`PCs, macOS computers), and tablets. (Google Android and Microsoft Surface). 20-5640, ECF
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`No. 118 at 15-20. The proper definition of the relevant market requires discovery and factual
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`development. See id. Here, Steam is within Apple’s proposed relevant market, and RFP 2 seeks
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`relevant information concerning this proposed relevant market.
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`Valve emphasizes that it does not participate in the mobile market and that it does not sell
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`mobile apps on Steam, and therefore argues that its information is irrelevant. However, that
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`argument assumes an answer to a heavily contested merits question, i.e., that the relevant market
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`will end up being defined as mobile apps. The Court can’t manage discovery by assuming merits
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`outcomes like that, especially on merits issues that are hotly disputed and core to these cases.
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`Apple is entitled to take discovery to support its arguments in favor of a broad market definition.
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`Valve also points out that Fortnite is not available on Steam and that Epic has publicly and
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`unequivocally stated that it will not offer Fortnite on Steam unless Valve changes its business
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`model. However, market definition does not likely turn on any one video game or any one video
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`game producer. 20-5640 ECF No. 118 at 19 (“Antitrust law is not concerned with individual
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`consumers or producers, like Epic Games; it is concerned with market aggregates.”).
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`Second, RFP 32 as narrowed by Apple during meet and confer seeks information relevant
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`to the effects of competition. Recall that in these related cases, Plaintiffs allege that Apple’s 30%
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`commission on sales through its App Store is anti-competitive and that allowing iOS apps to be
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`sold through other stores would force Apple to reduce its commission to a more competitive level.
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`Well, Steam is one of the largest video game stores for PCs, and it too charges a 30% commission.
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`Epic Games opened its video game store for PCs in December 2018, and Epic charges a
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`commission that is lower than 30%. By focusing RFP 32 on 436 specific games that are sold in
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`both Steam and Epic’s store, Apple seeks to take discovery into whether the availability of other
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`stores does in fact affect commissions in the way Plaintiffs allege. Likewise, the per-app
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`information sought by RFP 2 is similarly relevant to the effects of competition for apps that are
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`also available through a source other than Steam. Whether or not Judge Gonzalez Rogers ends up
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`defining the relevant market in this litigation to include PC video games, Apple could still point to
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`this evidence about competition between Steam and the Epic Games store as conduct in a similar
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`or analogous market. Thus, the information sought by the narrowed RFP 32, and the per-app
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`information sought by RFP 2 for apps available outside Steam, is relevant and proportional to this
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`case.
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`As for burden, Valve’s section of the letter brief indicates that Valve can obtain the
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`requested information by querying several different databases. In the letter brief, Valve said this
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`would be an overwhelming amount of work, but other than using adjectives, it did not substantiate
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`or quantify the burden in any way. At the hearing Valve offered more specifics about how this
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`data would be obtained, and it did not sound that burdensome. Nonetheless, the Court will narrow
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`RFP 2 somewhat and will adjust the timing of the document production (see discussion below) to
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`accommodate Valve’s needs.
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`Valve argues that RFPs 2 and 32 seek proprietary and highly confidential information, so
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`Apple must establish a substantial need that cannot otherwise be met without undue hardship
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`under Federal Rule of Civil Procedure 45(d)(3). The Court agrees that Apple must meet this
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`standard and believes it has done so. Apple has shown that it has a substantial need for this
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`information to obtain evidence in support of its arguments concerning market definition and the
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`effects of competition, and it cannot obtain this information elsewhere without undue burden.
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`Valve offers several reasons why Apple has not satisfied this standard, but none is persuasive.
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`First, Valve argues that “Apple argues the relevant market could be so broad as to include
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`any video game available through any channel, but gives no evidence this might actually be true.”
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`However, discovery is how Apple obtains that evidence. Apple does not need to prove its case to
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`be able to take discovery into evidence necessary to prove its case.
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`Second, Valve says that Apple’s proposed market definition is contradicted by its prior
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`ones. It is true that in a prior discovery hearing, Apple’s oral argument leaned so heavily on Epic
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`Games that the Court was left with the impression that Apple was defining the market in terms of
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`Epic alone, at least in the Epic Games case. 20-5640, ECF No. 296 at 4. However, Apple has
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`since clarified that is not its position. 20-5640 ECF No. 297-3, fn. 2.
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`Third, Valve argues that Apple seeks information about only a subset of games sold on
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`both Steam and the Epic Games Store (that’s the 436 apps). Valve says that this will not show
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`anything relevant because it is just evidence concerning two market participants. As an initial
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`matter, Apple narrowed RFP 32 to 436 specific apps because Valve complained that the RFP
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`asked about all 30,000+ apps on Steam, so this argument is an unfair attempt to use Apple’s good
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`faith in narrowing its RFP against Apple. Regardless, Valve is wrong, and its reliance on the
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`Court’s order at 20-5640 ECF No. 296 is mistaken. Steam and the Epic Games Store are stores
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`through which many market participants (developers) sell apps. The Court’s order at ECF No.
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`296 at 5 explained that information about any one app producer was of limited relevance. By
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`contrast, information about 436 apps that are available on both Steam and the Epic Games Store
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`could very well be relevant to showing the effects of competition, at least between those two
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`stores.
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`Fourth, Valve argues that the information Apple seeks about sales and pricing for third
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`party games belongs to the third party developers. Instead of subpoenaing those developers,
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`Valve argues that Apple took a shortcut by subpoenaing it. For this reason, Valve asserts it
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`properly redacted that information from volume 5 of its document production. However, the
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`Court disagrees. Requiring Apple to subpoena each individual game developer to obtain its
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`pricing and sales information would be an undue burden. Further, Valve has not shown that the
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`pricing information is confidential at all, and Valve has not shown that the sales information is
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`confidential to the third party. Valve is running a store, and how much it sells of what is its own
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`information. Further, the protective order in this action is sufficient to protect this information
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`even if it were confidential to the third party.
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`Fifth, Valve acknowledges that its own highly confidential sales and revenue information
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`is available only from Valve, but argues that it is a private company and derives significant value
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`and edge from the confidentiality of its information, including keeping it from competitors such as
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`Epic. Therefore, Valve also redacted its own sales and revenue information from its volume 5
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`Case 4:20-cv-05640-YGR Document 356 Filed 02/24/21 Page 6 of 6
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`document production. However, the Court disagrees with that as well. Valve’s decision to stay
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`private means that it avoids the public company disclosure and reporting requirements, but it does
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`not immunize the company from discovery. The protective orders in these actions allow Valve to
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`designate its documents confidential or highly confidential to address competitive concerns, and
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`that protection is sufficient. The Court orders Valve to remove the redactions from volume 5 of its
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`document production, except for any redactions of attorney-client privileged or attorney work
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`product information, if there are any.
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`In terms of the timing of Valve’s document productions, Apple requests to have the
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`documents by March 8, 2021 so that it may use them in expert rebuttal reports that are due by
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`March 15, 2021. Valve says this is doable for the aggregated financial data sought by RFP 2, but
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`not for that data broken down by app. Accordingly, the Court orders Valve to produce the
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`aggregated data sought by RFP 2 by March 8. As for the data sought by RFP 2 on a per-app basis,
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`the Court narrows RFP 2 and orders Valve to produce the per-app information only for the 436
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`apps available on both Steam and the Epic Games store (as providing that information broken
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`down for all 30,000+ apps is an unnecessary burden on Valve), and to produce that within 30
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`days. With respect to RFP 32, even as narrowed the date range (2015 to present) is a little
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`overbroad given that Epic’s store did not begin until December 2018. The Court therefore
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`narrows RFP 32 to 2017 to the present and orders Valve to produce the requested information for
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`the 436 apps within 30 days.
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`IT IS SO ORDERED.
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`Dated: February 24, 2021
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`THOMAS S. HIXSON
`United States Magistrate Judge
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