Case 4:20-cv-05640-YGR Document 821 Filed 10/08/21 Page 1 of 24
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`THEODORE J. BOUTROUS JR., SBN 132099
`tboutrous@gibsondunn.com
`RICHARD J. DOREN, SBN 124666
`rdoren@gibsondunn.com
`DANIEL G. SWANSON, SBN 116556
`dswanson@gibsondunn.com
`JAY P. SRINIVASAN, SBN 181471
`jsrinivasan@gibsondunn.com
`GIBSON, DUNN & CRUTCHER LLP
`333 South Grand Avenue
`Los Angeles, CA 90071
`Telephone: 213.229.7000
`Facsimile: 213.229.7520
`
`VERONICA S. MOYÉ (Texas Bar No.
`24000092; pro hac vice)
` vmoye@gibsondunn.com
`GIBSON, DUNN & CRUTCHER LLP
`2100 McKinney Avenue, Suite 1100
`Dallas, TX 75201
`Telephone: 214.698.3100
`Facsimile: 214.571.2900
`
` MARK A. PERRY, SBN 212532
`mperry@gibsondunn.com
`CYNTHIA E. RICHMAN (D.C. Bar No.
`492089; pro hac vice)
`crichman@gibsondunn.com
`GIBSON, DUNN & CRUTCHER LLP
`1050 Connecticut Avenue, N.W.
`Washington, DC 20036
`Telephone: 202.955.8500
`Facsimile: 202.467.0539
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`ETHAN DETTMER, SBN 196046
`edettmer@gibsondunn.com
`ELI M. LAZARUS, SBN 284082
`elazarus@gibsondunn.com
`GIBSON, DUNN & CRUTCHER LLP
`555 Mission Street
`San Francisco, CA 94105
`Telephone: 415.393.8200
`Facsimile: 415.393.8306
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`Attorneys for Defendant APPLE INC.
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`UNITED STATES DISTRICT COURT
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`FOR THE NORTHERN DISTRICT OF CALIFORNIA
`OAKLAND DIVISION
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`Case No. 4:20-cv-05640-YGR-TSH
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`APPLE INC.’S NOTICE OF MOTION AND
`MOTION FOR STAY OF INJUNCTION
`PENDING APPEAL AND MEMORANDUM
`OF POINTS AND AUTHORITIES IN
`SUPPORT THEREOF
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`EPIC GAMES, INC.,
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`v.
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`APPLE INC.,
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`Plaintiff, Counter-
`defendant
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`Defendant,
`Counterclaimant.
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`Case 4:20-cv-05640-YGR Document 821 Filed 10/08/21 Page 2 of 24
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`NOTICE OF MOTION AND MOTION
`TO THE COURT, ALL PARTIES, AND THEIR ATTORNEYS OF RECORD:
`PLEASE TAKE NOTICE that on November 16, 2021 at 2:00 p.m., or as soon thereafter as the
`matter may be heard by the Court, at the courtroom of the Honorable Yvonne Gonzalez Rogers,
`Courtroom 1, 14th Floor, United States District Court, 1301 Clay Street, Oakland, California,
`Defendant Apple Inc. will and hereby does move the Court to stay the September 10, 2021 Permanent
`Injunction (Dkt. 813) pending the resolution of appeals in this case. This motion is based on this Notice
`of Motion and Motion; the Memorandum of Points and Authorities that follows; the Declarations of
`Mark A. Perry and Trystan Kosmynka and exhibits thereto; the Proposed Order filed herewith; the
`pleadings and papers on file herein; and such other matters that may be presented to the Court at the
`hearing.
`
`DATED: October 8, 2021
`
`By
`
`
`
`
`/s/ Mark A. Perry
`GIBSON, DUNN & CRUTCHER LLP
`Theodore J. Boutrous Jr.
`Richard J. Doren
`Daniel G. Swanson
`Mark A. Perry
`Veronica S. Lewis
`Cynthia E. Richman
`Jay P. Srinivasan
`Ethan D. Dettmer
`Rachel Brass
`Attorneys for Apple Inc.
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`Case 4:20-cv-05640-YGR Document 821 Filed 10/08/21 Page 3 of 24
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`TABLE OF CONTENTS
`INTRODUCTION ................................................................................................................................ 1
`BACKGROUND .................................................................................................................................. 1
`A.
`The Court Enjoins Enforcement of Portions of Guidelines 3.1.1 & 3.1.3 .................... 3
`B.
`Apple Addresses Anti-Steering In Other Venues ......................................................... 5
`LEGAL STANDARD ........................................................................................................................... 6
`DISCUSSION ....................................................................................................................................... 7
`A.
`Apple Would Be Irreparably Harmed In The Absence Of A Stay ............................... 7
`B.
`Apple Has A Substantial Case For Relief On The Merits .......................................... 10
`1.
`There Is No UCL Violation............................................................................. 11
`2.
`Epic Lacks Standing ........................................................................................ 14
`3.
`The Injunction Is Beyond The Equitable Authority Of The Court ................. 15
`A Stay Will Not Injure Epic ........................................................................................ 18
`C.
`A Stay Is In The Public Interest .................................................................................. 18
`D.
`In The Alternative, The Court Should Temporarily Stay The Injunction ................... 19
`E.
`CONCLUSION ................................................................................................................................... 19
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`TABLE OF AUTHORITIES
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`Page(s)
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`CASES
`
`Bresgal v. Brock,
`843 F.2d 1163 (9th Cir. 1987) .........................................................................................................17
`
`Campbell v. Nat’l Passenger R.R. Corp.,
`No. 05-CV-5434, 2009 WL 4546673 (N.D. Cal. Nov. 30, 2009)...................................................19
`
`Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co.,
`20 Cal. 4th 163 (1999) ....................................................................................................................11
`
`Concord Assocs., L.P. v. Entm’t Props. Tr.,
`817 F.3d 46 (2d Cir. 2016) ..............................................................................................................12
`
`Conservation Congress v. U.S. Forest Serv.,
`No. 11-CV-2605, 2012 WL 3150307 (E.D. Cal. Aug. 1, 2012) .....................................................19
`
`Dameron Hosp. Ass’n v. State Farm Mut. Auto. Ins. Co.,
`No. 12-CV-2246, 2013 WL 5718886 (E.D. Cal. Oct. 15, 2013) ....................................................18
`
`Davis v. FEC,
`554 U.S. 724 (2008) ........................................................................................................................14
`
`Davis v. HSBC Bank Nev., N.A.,
`691 F.3d 1152 (9th Cir. 2012) .........................................................................................................13
`
`Easyriders Freedom F.I.G.H.T. v. Hannigan,
`92 F.3d 1486 (9th Cir. 1996) ...........................................................................................................17
`
`eBay Inc. v MercExchange, LLC,
`547 U.S. 388 (2006) ........................................................................................................................16
`
`Elliot v. Williams,
`No. 08-CV-829, 2011 WL 5080169 (D. Nev. Oct. 25, 2011) ........................................................19
`
`Facebook, Inc. v. Brandtotal, Ltd.,
`No. 20-CV-7182, 2021 WL 2354751 (N.D. Cal. June 9, 2021) .....................................................11
`
`Gregory v. Albertson’s, Inc.,
`104 Cal. App. 4th 845 (2002) .........................................................................................................11
`
`Hangarter v. Provident Life & Accident Ins. Co.,
`373 F.3d 998 (9th Cir. 2004) ...........................................................................................................14
`
`Hilton v. Braunskill,
`481 U.S. 770 (1987) ..........................................................................................................................6
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`Hunt v. Check Recovery Sys., Inc.,
`No. 05-CV-4993, 2008 WL 2468473 (N.D. Cal. June 17, 2008) ...................................................18
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`Lair v. Bullock,
`697 F.3d 1200 (9th Cir. 2012) ...........................................................................................................6
`
`Levi Strauss & Co. v. Shilon,
`121 F.3d 1309 (9th Cir. 1997) .........................................................................................................16
`
`Lozano v. AT&T Wireless Servs., Inc.,
`504 F.3d 718 (9th Cir. 2007) ...........................................................................................................13
`
`Lujan v. Defs. of Wildlife,
`504 U.S. 555 (1992) ........................................................................................................................14
`
`Madsen v. Women’s Health Ctr., Inc.,
`512 U.S. 753 (1994) ........................................................................................................................17
`
`Nat’l Collegiate Athletic Ass’n v. Alston,
`141 S. Ct. 2141 (2021) ......................................................................................................................8
`
`Ohio v. Am. Express Co.,
`138 S. Ct. 2274 (2018) ..................................................................................................2, 8, 9, 11, 13
`
`Piper Restoration Techs., LLC v. Coast Bldg. & Plumbing, Inc.,
`No. 13-CV-499, 2018 WL 6012219 (C.D. Cal. Nov. 16, 2018) .....................................................16
`
`Snapkeys, Ltd. v. Google LLC,
`No. 19-CV-2658, 2020 WL 6381354 (N.D. Cal. Oct. 30, 2020) ....................................................11
`
`Sonner v. Premier Nutrition Corp.,
`971 F.3d 834 (9th Cir. 2020) ...........................................................................................................16
`
`State Oil Co. v. Khan,
`522 U.S. 3 (1997) ............................................................................................................................13
`
`Wal-Mart Stores, Inc. v. Dukes,
`564 U.S. 338 (2011) ........................................................................................................................17
`
`Warth v. Seldin,
`422 U.S. 490 (1975) ..................................................................................................................14, 15
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`Zepeda v. U.S. I.N.S.,
`753 F.2d 719 (9th Cir. 1983) ...........................................................................................................17
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`INTRODUCTION
`Apple asks the Court to suspend the requirements of its injunction until the appeals filed by
`both Epic and Apple have been resolved. The company understands and respects the Court’s concerns
`regarding communications between developers and consumers. Apple is carefully working through
`many complex issues across a global landscape, seeking to enhance information flow while protecting
`both the efficient functioning of the App Store and the security and privacy of Apple’s customers.
`Striking the right balance may solve the Court’s concerns making the injunction (and perhaps even
`Apple’s appeal itself) unnecessary. A stay is warranted in these circumstances.
`The Court presided over a 16-day trial in May. The CEOs of both Epic Games, Inc. and Apple
`Inc. testified, along with other top executives and numerous expert witnesses. Hundreds of exhibits
`were admitted into evidence. Based on this robust record, the Court issued a detailed 185-page opinion,
`concluding that Epic failed to prove that Apple violated any federal or state antitrust law. Dkt. 812
`(“Op.”). Apple was not found to be a monopolist. Observing that “[s]uccess is not illegal,” Op. at 1,
`the Court ruled against Epic on nine of its ten claims and rejected Epic’s request for a sweeping
`injunction that would have transformed the App Store’s business model.
`On Epic’s tenth claim, the Court concluded that Apple’s so-called anti-steering provisions—
`two sentences in the App Store Review Guidelines that restrict in-app and targeted out-of-app
`communications regarding alternative payment options—are contrary to California’s Unfair
`Competition Law (the “UCL”). Epic barely mentioned that claim during the trial and offered no
`evidence that it was harmed by the anti-steering provisions. Nor did Epic present any evidence
`regarding how revisions to the Guidelines could or would be implemented, or the effects of any such
`changes on consumers, developers, or Apple. While recognizing that the trial record was less than
`fulsome, the Court concluded that the anti-steering provisions are “unfair” under the UCL. Op. at 163,
`179.
`
` As relevant here, the Court enjoined Apple from enforcing the Guideline that prohibits
`developers from including in-app “buttons, external links, or other calls to action”—while still
`permitting Apple to take steps to enhance information flow between developers and consumers without
`“impact[ing] the integrity of the [iOS] ecosystem.” Op. at 163–64. However, precipitous
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`implementation of this aspect of the injunction would upset the careful balance between developers
`and customers provided by the App Store, and would irreparably harm both Apple and consumers. The
`requested stay will allow Apple to protect consumers and safeguard its platform while the company
`works through the complex and rapidly evolving legal, technological, and economic issues that any
`revisions to this Guideline would implicate.
`Apple is likely to succeed on appeal. Epic’s theory of liability under the UCL cannot be
`reconciled with the findings and conclusions the Court made elsewhere in its opinion, particularly in
`recognizing the procompetitive justifications for Apple’s IAP requirement. Indeed, the Supreme Court
`has recognized the procompetitive effects of anti-steering provisions in particular, which fulfill the
`“promise of a frictionless transaction.” Ohio v. Am. Express Co., 138 S. Ct. 2274, 2289 (2018). The
`undisputed evidence in this case established that operators of two-sided transaction platforms, like the
`App Store, commonly impose some kind of steering restrictions on platform participants. Epic’s own
`expert witness agreed that common practices in competitive markets are efficient—i.e., procompetitive.
`Epic will suffer no harm from a stay because, as authorized by the Court’s decision, Apple
`recently rejected Epic’s request to reinstate its developer program account; Epic has no live apps on
`the App Store and thus no standing to enforce the injunction. Moreover, the trial evidence establishes
`that Epic has never been harmed by the anti-steering provisions. And the public interest favors
`maintaining the status quo while the case works its way through the appellate process. Indeed, because
`Epic continues to seek broader relief, including an injunction against Apple’s IAP requirement, it would
`be more prudent to wait and see how the appeals are decided before requiring Apple to implement any
`changes to the App Store.
`There are many complexities to running the global iOS ecosystem, with close to 200 storefronts,
`millions of developers, and billions of customers. As the Court recognized, Apple operates in a
`dynamic environment, with the trial being a “snapshot” at a single point in time in a “moving stream.”
`Trial Tr. 3839:19–23. Implementing the injunction on December 9 could have unintended downstream
`consequences for consumers and the platform as a whole. Apple is working hard to address these
`difficult issues in a changing world, enhancing information flow without compromising the consumer
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`experience. A stay of the injunction would permit Apple to do so in a way that maintains the integrity
`of the ecosystem, and that could obviate the need for any injunction regarding steering.
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`A.
`
`BACKGROUND
`The Court Enjoins Enforcement of Portions of Guidelines 3.1.1 & 3.1.3
`Epic brought this case alleging that a variety of “technical” and “contractual” restrictions set by
`Apple for its App Store violate Sections 1 and 2 of the Sherman Act, California’s Cartwright Act, and
`California’s Unfair Competition Law (the “UCL”). See generally Dkt. 1. Although referenced only
`obliquely in Epic’s complaint, Epic also challenged the so-called “anti-steering” provisions in the App
`Store Review Guidelines, which generally prohibit developers from (1) including external links,
`buttons, or other calls to action in an app directing the user to an alternative payment platform
`(Guideline 3.1.1), and (2) using information collected within the app (such as email addresses) to
`communicate with customers outside of the app regarding alternative payment platforms (Guideline
`3.1.3). See id. ¶¶ 130–31. As the Court acknowledged from the outset, Epic’s claims were at “the
`frontier edges of antitrust law in the United States.” Dkt. 118 at 10. Importantly, Epic’s challenge to
`those provisions did not stand alone, but instead was intertwined with its allegations that the IAP
`requirement was an anticompetitive restraint and that in-app payment functionality was tied to app
`distribution, which the Court properly rejected. Dkt. 1 ¶ 132; see also Dkt. 407 (Epic’s Pretrial
`Proposed Conclusions of Law) ¶ 418.
`After a bench trial, the Court upheld Apple’s practices under federal and state antitrust laws and
`concluded Epic breached its contractual agreements with Apple. In its analysis, the Court recognized
`that Apple legitimately monetized its platform by requiring use of IAP for in-app purchases of digital
`goods. Op. at 149–50. The Court received substantial evidence that Apple enforced Guideline 3.1.1
`to that end. See, e.g., Trial Tr. 1018:21–1019:4, 1019:24–1020:7, 1021:19–25, 1022:20–22, 1130:2–
`16 (Kosmynka). This included Apple’s removal of Fortnite when Epic breached (among other
`obligations) Guideline 3.1.1’s prohibition on including buttons or external links to non-IAP purchasing
`mechanisms. See Trial Tr. 2820:18–2821:4 (Schiller). All of this was legitimate: “The requirement
`of usage of IAP,” the Court concluded, was the “easiest and most direct” way for Apple to collect
`compensation for “licens[ing] its intellectual property.” Op. at 150.
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`The Court additionally held that in light of Epic’s admission that it had breached sections 3.2,
`3.3.2, 3.3.3, 3.3.25 of the DPLA, as well as section 1.1(a) and 3.4(a) of Schedule 2 to the DPLA, Epic
`was liable for breach of contract. Op. at 168. The Court found that Epic’s “hotfix . . . clandestinely
`enabled substantive [payment] features in willful violation” of its contractual obligations. Id. at 21.
`The Court rejected Epic’s argument that the relevant provisions of the DPLA were illegal, void as
`against public policy, or unconscionable, holding that its conclusions regarding the lawfulness of the
`challenged provisions under the Sherman Act and the Cartwright Act precluded those defenses. Id. at
`168–73. The Court accordingly ordered Epic to pay damages in the amount of 30% of all revenues
`collected from users in the Fortnite iOS app from the implementation of the “hotfix” through the date
`of judgment, and issued declaratory judgment that “Apple’s termination of the DPLA and the related
`agreements between Epic Games and Apple was valid, lawful, and enforceable” and that “Apple has
`the contractual right to terminate its DPLA with any or all of Epic Games’ wholly owned
`subsidiaries . . . at any time and at Apple’s sole discretion.” Id. at 179.
`Acknowledging that the record “was less fulsome,” however, the Court separately addressed
`Apple’s anti-steering provisions under the UCL. Op. at 163. Although the Court concluded none of
`the contractual provisions Epic breached—one of which was Guideline 3.1.1’s restrictions on links and
`buttons, Trial Tr. 2820:18–2821:4 (Schiller)—was unlawful, Op. at 169–70, the Court concluded that
`Apple’s anti-steering provisions are “unfair” within the meaning of the UCL, id. at 164. The basis for
`the Court’s ruling was its concern about “the open flow of information.” Id. The Court reasoned that
`with a more “open flow of information,” users could more easily “discover[] the lowest cost seller”
`and could more accurately “attribute costs to the platform versus the developer.” Id.
`On the basis of its finding of liability under the UCL, the Court issued a permanent injunction
`slated to take effect on December 9, 2021:
`Apple Inc. and its officers, agents, servants, employees, and any person in active concert
`or participation with them (‘Apple’), are hereby permanently restrained and enjoined
`from prohibiting developers from (i) including in their apps and their metadata buttons,
`external links, or other calls to action that direct customers to purchasing mechanisms,
`in addition to In-App Purchasing and (ii) communicating with customers through points
`of contact obtained voluntarily from customers through account registration within the
`app.
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`Dkt. 813. The Court concluded that this was a “measured remedy” that would “increase competition,
`increase transparency, increase consumer choice and information while preserving Apple’s iOS
`ecosystem which has procompetitive justifications” without “requir[ing] the Court to micromanage
`business operations.” Op. at 179.
`The injunctive relief applies not just to Epic—which cannot even benefit from the injunction
`because it no longer has a developer program account with Apple or any live apps on the App Store—
`but to all developers in the United States. Dkt. 813. By its terms, the injunction will take effect ninety
`days from its issuance (i.e., December 9, 2021) and has no termination date. Id.
`Following the Court’s decision, Mr. Sweeney stated publicly that “Fortnite will return to the
`iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app
`payment, passing along the savings to consumer.” Perry Decl. Ex. A. He continued: “Thinking much
`more about whether we’re going to live in a world where two platform megacorps dictate software and
`world commerce to everyone or whether the digital world and the future metaverse will be a free world.
`Wouldn’t trade that away to get Fortnite back on iOS.” Perry Decl. Ex. B; see also id. Ex. C. Based
`on these and other statements, which make clear that Epic has no intention of complying with Apple’s
`Guidelines notwithstanding any protestations to the contrary, Apple advised Epic that it would not be
`reinstating Epic’s Developer Account or the Fortnite app. Perry Decl. Ex. D. Apple explained that
`“Epic committed an intentional breach of contract, and breach of trust, by concealing code from Apple
`and making related misrepresentations and omissions.” Id. In light of Epic’s adjudicated misconduct
`and Mr. Sweeney’s post-decision statements, and as expressly authorized by the Court’s decision,
`Apple “exercised its discretion not to reinstate Epic’s developer program account at this time.” Id. As
`a result, Epic has no live apps (including Fortnite) on the App Store.
`Epic filed a notice of appeal on September 13, 2021. Dkt. 817. Apple filed a cross-appeal on
`October 8, 2021.
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`B.
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`Apple Takes Steps To Enhance Information Flow Between Developers and Consumers
`Apple regularly reviews and revises its Guidelines in response to developer and consumer
`feedback, competitive developments, and other considerations. Even before the Court’s decision in
`Epic, Apple began exploring changes to the Guidelines applicable to developer-customer
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`5
`APPLE INC.’S MOTION FOR STAY OF INJUNCTION PENDING APPEAL, 4:20-CV-05640-YGR
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`Case 4:20-cv-05640-YGR Document 821 Filed 10/08/21 Page 11 of 24
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`communications. These proposed changes are intended to allow for an increased flow of information
`to users while preserving the integrity of the ecosystem.
`Most significantly, Apple reached a settlement in the developer class action asserting
`substantially the same claims as Epic. See Motion for Preliminary Approval of Settlement, Cameron
`v. Apple Inc., No. 19-CV-3074 (Aug. 26, 2021), Dkt. 396. As detailed in the settlement, Apple has
`agreed (among other things) to “[p]ermit all U.S. Developers to communicate with their customers via
`email and other communication services outside their app about purchasing methods other than in-app
`purchase, provided that the customer consents to the communication and has the right to opt out.”
`Stipulation of Settlement § 5.1.3 Cameron, No. 19-CV-3074 (Aug. 26, 2021), Dkt. 396-1 Ex. A. The
`Court has scheduled a hearing on the developer class plaintiffs’ motion for preliminary approval of the
`settlement for November 2, 2021. See Order, Cameron, No. 19-CV-3074 (Sept. 28, 2021), Dkt. 433.
`In addition, Apple is working on other changes to its Guidelines in resolution of an investigation
`by the Japan Fair Trade Commission, which was also reached before the Court issued its Epic decision.
`Perry Decl. Ex. E. These changes, which require time to develop and implement, will go into effect in
`early 2022. Id.
`
`LEGAL STANDARD
`Federal Rule of Civil Procedure 62(d) authorizes a district court to stay enforcement of a
`permanent injunction pending appeal. See Hilton v. Braunskill, 481 U.S. 770, 776 (1987). A request
`for a stay is analyzed under four factors:
`
`(1) whether the stay applicant has made a strong showing that he is likely to succeed on
`the merits; (2) whether the applicant will be irreparably injured absent a stay; (3)
`whether issuance of the stay will substantially injure the other parties interested in the
`proceeding; and (4) where the public interest lies.
`Lair v. Bullock, 697 F.3d 1200, 1203 (9th Cir. 2012). The first factor requires the movants to show
`only “that there is a substantial case for relief on the merits”; “[t]he standard does not require the
`[movants] to show that it is more likely than not that they will on the merits.” Id. at 1204 (quotation
`marks omitted).
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`6
`APPLE INC.’S MOTION FOR STAY OF INJUNCTION PENDING APPEAL, 4:20-CV-05640-YGR
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`Case 4:20-cv-05640-YGR Document 821 Filed 10/08/21 Page 12 of 24
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`DISCUSSION
`
`The Court’s injunction is in two parts, precluding Apple from enforcing (1) the Guideline
`prohibition against links, buttons, or other calls to action within an app; and (2) the Guideline
`prohibition against targeted communications outside the app. Apple has already addressed targeted
`out-of-app communications in the Cameron settlement, which will result in the deletion of the clause
`that the Court has enjoined. As to in-app communications, the injunction requires Apple to strike the
`“call to action” provision, but does not prevent the adoption of a solution that would result in enhanced
`information flow between developers and consumers while still constraining those communications in
`appropriate ways to preserve the integrity of the ecosystem. Such a solution, however, is
`technologically and economically complex and requires consideration of events on the global stage.
`Accordingly, Apple respectfully requests that the injunction be stayed pending the appeal, during which
`Apple will continue to work on a solution that could render any injunction unnecessary.
`
`A.
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`Apple Would Be Irreparably Harmed In The Absence Of A Stay
`Absent a stay, Apple would be forced to permit developers to engage in conduct that will disrupt
`Apple’s lawful App Store business model. While Apple is taking steps to increase the flow of
`information from developers to consumers, some developers (including Epic) misread the injunction
`to permit unconstrained in-app messaging or links. Indeed, despite the Court’s acknowledgment that
`its remedy was not intended to have “any impact on the integrity of the ecosystem,” Op. at 164, some
`commentators have asserted that “the fabric of Apple’s App Store could be forever changed” by the
`Court’s injunction, see, e.g., Perry Decl. Ex. F. Mr. Sweeney has touted an expansive view of the
`Court’s injunction that not only would require Apple to allow links directing customers to developer’s
`websites but, apparently, also would permit developers to install competing payment mechanisms such
`as the one implemented by Epic’s hotfix at the culmination of Project Liberty—notwithstanding that
`the Court held Epic liable for breach of contract as a result of the hotfix. Perry Decl. Ex. C.
`To be clear, Apple disagrees with this broad interpretation of the injunction, but Epic’s apparent
`endorsement of this view threatens Apple’s ability to operate its platform. At least one other developer
`has already publicly announced its intention to offer an alternative payment system for digital goods
`and services transactions within iOS apps. Perry Decl. Ex. G. One of its selling points raises clear red
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`7
`APPLE INC.’S MOTION FOR STAY OF INJUNCTION PENDING APPEAL, 4:20-CV-05640-YGR
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`Case 4:20-cv-05640-YGR Document 821 Filed 10/08/21 Page 13 of 24
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`flags: In contrast to Apple’s strict rules surrounding privacy, that developer intends to provide access
`to user email addresses. Perry Decl. Ex. H. Moreover, in the weeks following the Court’s decision, a
`number of developers have asked Apple to clarify what will and will not be permitted. Kosmynka
`Decl. ¶ 9. The Court has stricken one sentence of Guideline 3.1.1, but did not disable Apple from
`otherwise running its business or protecting consumers.
`The approach advocated by Epic and others will disrupt “the optimal balance” between the two
`sides of the App Store platform. Amex, 138 S. Ct. at 2281. This is important in light of the Supreme
`Court’s recognition that such balance “is essential for two-sided platforms to maximize the value of
`their services and to compete with their rivals.” Id. Simply put, steering users to other payment
`solutions undermines the “promise of a frictionless transaction” and “undermine[s] the investments
`that [Apple] has made to encourage increased [customer] spending” on its platform. Id. at 2289.
`The Court expressly found that Apple is entitled to collect a commission from developers for
`use of its platform, regardless of whether that commission is collected through IAP. See