Case: 21-16506, 03/24/2022, ID: 12404491, DktEntry: 93, Page 1 of 135
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`Nos. 21-16506 & 21-16695
`_______________________
`IN THE UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`_______________________
`EPIC GAMES, INC.,
`Plaintiff/counter-defendant,
`Appellant/cross-appellee;
`
`v.
`APPLE INC.,
`
`Defendant/counter-claimant,
`Appellee/cross-appellant.
`_______________________
`On Appeal from the United States District Court
`for the Northern District of California (Hon. Yvonne Gonzalez Rogers)
`No. 4:20-cv-05640-YGR
`_______________________
`PRINCIPAL AND RESPONSE BRIEF FOR
`APPELLEE/CROSS-APPELLANT APPLE INC.
`_______________________
`
`Theodore J. Boutrous, Jr.
`Daniel G. Swanson
`GIBSON, DUNN & CRUTCHER LLP
`333 S. Grand Ave.
`Los Angeles, CA 90071
`
`Rachel S. Brass
`Julian W. Kleinbrodt
`GIBSON, DUNN & CRUTCHER LLP
`555 Mission St., Suite 3000
`San Francisco, CA 94105
`
`Mark A. Perry
`Cynthia Richman
`Joshua M. Wesneski
`Anna Casey
`Zachary B. Copeland
`GIBSON, DUNN & CRUTCHER LLP
`1050 Connecticut Avenue, N.W.
`Washington, D.C. 20036
`(202) 955-8500
`MPerry@gibsondunn.com
`
`Attorneys for Apple Inc.
`
`
`
`
`
`
`
`
`
`

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`
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`CORPORATE DISCLOSURE STATEMENT
`
`
`
`Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure, the
`
`undersigned counsel of record certifies that Apple Inc. has no parent corporation and
`
`no publicly held corporation owns 10% or more of its stock.
`
`Dated: March 24, 2022
`
`
`
`
`
`
`
`
`s/ Mark A. Perry
`Mark A. Perry
`
`
`
`i
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`Case: 21-16506, 03/24/2022, ID: 12404491, DktEntry: 93, Page 3 of 135
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`
`
`TABLE OF CONTENTS
`
`
`Page
`
`
`INTRODUCTION ..................................................................................................... 1
`JURISDICTIONAL STATEMENT .......................................................................... 5
`STATEMENT OF ISSUES ....................................................................................... 5
`STATUTORY PROVISIONS ................................................................................... 6
`BACKGROUND ....................................................................................................... 6
`I.
`Factual Background ............................................................................... 6
`A. Apple’s Revolutionary Innovations ............................................ 7
`1.
`The App Store ................................................................... 7
`2.
`IAP .................................................................................... 8
`3.
`Security, Privacy, Reliability, Fraud Protection,
`And App Quality............................................................... 9
`Intellectual Property ....................................................... 12
`4.
`The Challenged Limitations ........................................... 13
`5.
`Competition For Digital Game Transactions ............................ 14
`B.
`Epic’s “Project Liberty” ............................................................ 18
`C.
`Proceedings Below .............................................................................. 20
`II.
`III. The District Court’s Decision ............................................................. 23
`A.
`Epic’s Claims ............................................................................ 25
`1.
`Sherman Act ................................................................... 25
`2.
`Cartwright Act ................................................................ 29
`3.
`UCL ................................................................................ 29
`
`
`
`ii
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`
`
`B.
`
`Apple’s Counterclaims .............................................................. 30
`1.
`Breach of Contract .......................................................... 31
`2.
`Indemnity ........................................................................ 31
`STANDARDS OF REVIEW ................................................................................... 31
`SUMMARY OF ARGUMENT ............................................................................... 33
`ARGUMENT ON EPIC’S APPEAL ....................................................................... 37
`I.
`Epic Failed To Prove Its Market Definitions Or Monopoly
`Power ................................................................................................... 38
`A.
`Epic’s Proposed iOS-Only Markets Are Defective .................. 39
`1.
`Epic’s Market Definition Arguments Are
`Untenable Under Amex ................................................... 41
`Epic Failed to Prove Lock-In On Either Side Of Its
`Alleged Markets .............................................................. 45
`Apple Is Not A Monopolist ....................................................... 49
`1.
`There Is No Direct Evidence Of Monopoly Power ........ 50
`2.
`Epic Failed To Produce Circumstantial Evidence
`Of Monopoly Power ....................................................... 54
`Epic Challenged Only Unilateral Conduct By Apple ......................... 56
`A.
`The District Court Correctly Found No Concerted Action ...... 57
`B.
`Apple’s Unilateral Conduct Is Lawful ...................................... 62
`III. Apple’s Distribution Model Is Lawful Under the Rule of
`Reason ................................................................................................. 66
`A.
`The App Store Distribution Requirement Is Reasonable
`Under Section 1 ......................................................................... 66
`1.
`Epic Failed To Prove Substantial Anticompetitive
`Effects ............................................................................. 67
`
`2.
`
`B.
`
`II.
`
`
`
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`
`
`2.
`3.
`
`4.
`
`Procompetitive Justifications Defeat Epic’s Claims ...... 74
`Epic Did Not Prove Viable Less Restrictive
`Alternatives ..................................................................... 80
`The Court Undertook Every Step Required By The
`Rule Of Reason ............................................................... 85
`The App Store Distribution Requirement Is Reasonable
`Under Section 2 ......................................................................... 90
`IV. Apple’s IAP Requirement Is Lawful Under The Rule Of
`Reason ................................................................................................. 92
`A.
`There Is No Unlawful “Tie” ..................................................... 92
`B.
`There Is No Unreasonable Restraint ......................................... 96
`Epic Cannot Escape Liability For Its Breaches Of Contract. ...........100
`V.
`ARGUMENT ON APPLE’S CROSS-APPEAL ...................................................101
`I.
`The UCL Injunction Cannot Stand ...................................................101
`A.
`Epic Lacks Standing ...............................................................102
`B.
`UCL Liability Is Foreclosed As A Matter Of Law .................104
`C.
`The Injunction Is Beyond The Authority Of The Court .........109
`Epic Must Pay Apple’s Attorneys’ Fees ...........................................112
`II.
`CONCLUSION ......................................................................................................115
`
`B.
`
`
`
`iv
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`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`CASES
`1-800 Contacts, Inc. v. FTC,
`1 F.4th 102 (2d Cir. 2021) ...................................................................... 52, 68, 85
`Aerotec Int’l Inc. v. Honeywell Int’l, Inc.,
`836 F.3d 1171 (9th Cir. 2016) ............................................................... 58, 79, 95
`Alki Partners, LP v. DB Fund Servs., LLC,
`4 Cal. App. 5th 574 (2016) ............................................................................... 112
`Allied Orthopedic v. Tyco,
`592 F.3d 991 (9th Cir. 2010) .................................................................. 66, 87, 91
`Am. Ad Mgmt. Inc. v. GTE Corp.,
`92 F.3d 781 (9th Cir. 1996) ................................................................................ 87
`Am. Needle, Inc. v. NFL,
`560 U.S. 183 (2010) ....................................................................57, 58, 59, 61, 66
`Apple, Inc. v. Psystar Corp.,
`586 F. Supp. 2d 1190 (N.D. Cal. 2008) .............................................................. 39
`Arizonans for Official English v. Arizona,
`520 U.S. 43 (1997) ............................................................................................ 103
`Aya Healthcare Services, Inc. v. AMN Healthcare, Inc.,
`9 F.4th 1102 (9th Cir. 2021) ................................................................... 72, 74, 87
`Bailey v. Allgas, Inc.,
`284 F.3d 1237 (11th Cir. 2002) .................................................................... 53, 54
`Berkey Photo, Inc. v. Eastman Kodak Co.,
`603 F.2d 263 (2d Cir. 1979) ............................................................................... 65
`Blue Cross & Blue Shield United of Wis. v. Marshfield Clinic,
`65 F.3d 1406 (7th Cir. 1995). ............................................................................. 53
`Bresgal v. Brock,
`843 F.2d 1163 (9th Cir. 1987) .......................................................................... 111
`
`
`
`v
`
`

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`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`
`
`Brooke Grp. Ltd v. Brown & Williamson Tobacco Corp.,
`509 U.S. 209 (1993) ................................................................................ 51, 54, 69
`Brown Shoe Co. v. United States,
`370 U.S. 294 (1962) ............................................................................................ 44
`Cal. Dental Ass’n v. FTC,
`526 U.S. 756 (1999) ............................................................................ 70, 107, 108
`Cal. Dental Ass’n v. FTC,
`224 F.3d 942 (9th Cir. 2000) .............................................................. 67, 107, 109
`Califano v. Yamasaki,
`442 U.S. 682 (1979) .......................................................................................... 110
`Chavez v. Whirlpool Corp.,
`93 Cal. App. 4th 363 (2001) ............................................................................. 105
`City of San Jose v. Off. of the Comm’r of Baseball,
`776 F.3d 686 (9th Cir. 2015) ...................................................................... 32, 105
`Columbia Pictures Indus., Inc. v. Fung,
`710 F.3d 1020 (9th Cir. 2013) ............................................................................ 32
`Cont’l Auto. Sys., Inc. v. Avanci, L.L.C.,
`— F.4th —, 2022 WL 594324 (5th Cir. Feb. 28, 2022) ................................... 104
`Copperweld Corp. v. Indep. Tube Corp.,
`467 U.S. 752 (1984) ....................................................................56, 57, 58, 60, 62
`County of Tuolumne v. Sonora Cmty. Hosp.,
`236 F.3d 1148 (9th Cir. 2001) ................................................................ 84, 88, 90
`Deutscher Tennis Bund v. ATP Tour, Inc.,
`610 F.3d 820 (3d Cir. 2010) ............................................................................... 39
`Digidyne Corp. v. Data Gen. Corp.,
`734 F.3d 1336 (9th Cir. 1984) ............................................................................ 45
`Dream Theater, Inc. v. Dream Theater,
`124 Cal. App. 4th 547 (2004) ........................................................................... 113
`vi
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`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`
`Dunn v. Phoenix Newspapers, Inc.,
`735 F.2d 1184 (9th Cir. 1984) ............................................................................ 38
`Eastman Kodak Co. v. Image Tech. Servs., Inc.,
`504 U.S. 451 (1992) ............................................................................................ 47
`Easyriders Freedom F.I.G.H.T. v. Hannigan,
`92 F.3d 1486 (9th Cir. 1996) ............................................................................ 111
`eBay Inc. v. MercExchange, LLC,
`547 U.S. 388 (2006) .......................................................................................... 111
`Eberle v. City of Anaheim,
`901 F.2d 814 (9th Cir. 1990) .............................................................................. 57
`Facebook, Inc. v. BrandTotal Ltd.,
`No. 20-CV-7182, 2021 WL 2354751 (N.D. Cal. June 9, 2021) ...................... 108
`Forsyth v. Humana,
`114 F.3d 1467 (9th Cir. 1997) ............................................................................ 54
`FTC v. Qualcomm Inc.,
`969 F.3d 974 (9th Cir. 2020) .... 25, 39, 54, 62, 63, 65, 67, 70, 71, 74, 75, 87, 90,
` ............................................................................................................. 96, 106, 109
`Gen. Talking Pictures Corp. v. W. Elec. Co.,
`305 U.S. 124 (1938) ............................................................................................ 64
`Glob. Disc. Travel Servs., LLC v. Trans World Airlines, Inc.,
`960 F. Supp. 701 (S.D.N.Y. 1997) ..................................................................... 49
`Gorlick Distrib. Ctrs., LLC v. Car Sound Exhaust Sys., Inc.,
`723 F.3d 1019 (9th Cir. 2013) ............................................................................ 77
`Gough v. Rossmoor Corp.,
`585 F.2d 381 (9th Cir. 1978) .............................................................................. 40
`Green Country Food Mkt., Inc. v. Bottling Grp., LLC,
`371 F.3d 1275 (10th Cir. 2004) .......................................................................... 39
`Greyhound Comput. Corp., Inc. v. IBM,
`559 F.2d 488 (9th Cir. 1977) .............................................................................. 52
`
`
`
`vii
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`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`
`Hairston v. Pac 10 Conf.,
`101 F.3d 1315 (9th Cir. 1996) ............................................................................ 85
`Hangarter v. Provident Life & Accident Ins. Co.,
`373 F.3d 998 (9th Cir. 2004) ............................................................................ 103
`Hansberry v. Lee,
`311 U.S. 32 (1940) ............................................................................................ 111
`Haro v. Sebelius,
`747 F.3d 1099 (9th Cir. 2014) ............................................................................ 32
`Harrison Aire, Inc. v. Aerostar Int’l, Inc.,
`423 F.3d 374 (3d Cir. 2005) ............................................................................... 47
`Heerwagen v. Clear Channel Commc’ns,
`435 F.3d 219 (2d Cir. 2006) ............................................................................... 50
`Hodges v. Comcast Cable Commc’ns, LLC,
`21 F.4th 535 (9th Cir. 2021) ............................................................................. 110
`Image Tech. Servs., Inc. v. Eastman Kodak Co.,
`125 F.3d 1195 (9th Cir. 1997) ................................. 39, 55, 62, 63, 65, 76, 77, 91
`Image Tech. Serv., Inc. v. Eastman Kodak Co.,
`903 F.2d 612 (9th Cir. 1990) .............................................................................. 91
`In re ISO Antitrust Litig.,
`203 F.3d 1322 (Fed. Cir. 2000) .......................................................................... 64
`Jack Russell Terrier Network of N. Cal. v. Am. Kennel Club, Inc.,
`407 F.3d 1027 (9th Cir. 2005) ...................................................................... 56, 60
`Jefferson Par. Hosp. Dist. No. 2 v. Hyde,
`466 U.S. 2 (1984) .................................................................................... 60, 74, 92
`Kaiser Steel Corp. v. Mullins,
`455 U.S. 72 (1982) ............................................................................................ 100
`Kec v. Super. Ct. of Orange Cnty.,
`51 Cal. App. 5th 972 (2020) ............................................................................. 100
`
`
`
`viii
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`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`
`Kolon Indus. Inc. v. E.I. DuPont de Nemours & Co.,
`748 F.3d 160 (4th Cir. 2014) .............................................................................. 55
`Krehl v. Baskin-Robbins Ice Cream Co.,
`664 F.2d 1348 (9th Cir. 1982) ............................................................................ 92
`L.A. Haven Hospice, Inc. v. Sebelius,
`638 F.3d 644 (9th Cir. 2011) ............................................................................ 110
`L.A. Land Co. v. Brunswick Corp.,
`6 F.3d 1422 (9th Cir. 1993) ................................................................................ 32
`L.A. Mem’l Coliseum Comm’n v. NFL,
`726 F.2d 1381 (9th Cir. 1984) ............................................................................ 87
`Law v. NCAA,
`134 F.3d 1010 (10th Cir. 1998) .................................................................... 78, 89
`Leegin Creative Leather Prods., Inc. v. PSKS, Inc.,
`551 U.S. 877 (2007) ................................................................................ 66, 79, 87
`Levi Case Co. v. ATS Prods., Inc.,
`788 F. Supp. 428 (N.D. Cal. 1992) ..................................................................... 60
`Lewis v. Ayers,
`681 F.3d 992 (9th Cir. 2012) ........................................................................ 47, 49
`LiveUniverse, Inc. v. MySpace, Inc.,
`304 F. App’x 554 (9th Cir. 2008) ..................................................................... 105
`Lozano v. AT&T Wireless Servs., Inc.,
`504 F.3d 718 (9th Cir. 2007) ............................................................................ 104
`Lujan v. Defs. of Wildlife,
`504 U.S. 555 (1992) .......................................................................................... 102
`M.A.P. Oil Co. v. Texaco Inc.,
`691 F.2d 1303 (9th Cir. 1982) ............................................................................ 40
`MacDermid Printing Sols. LLC v. Cortron Corp.,
`833 F.3d 172 (2d Cir. 2016) ................................................................... 68, 73, 74
`
`
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`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`
`Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co.,
`571 F.3d 873 (9th Cir. 2009) .............................................................................. 32
`McGill v. Citibank, N.A.,
`2 Cal. 5th 945 (2017) ........................................................................................ 110
`McWane v. FTC,
`783 F.3d 814 (11th Cir. 2015) ............................................................................ 52
`Monsanto Co. v. Spray-Rite Serv. Corp.,
`465 U.S. 752 (1984) ............................................................................................ 57
`Nat’l Soc’y of Pro. Eng’rs v. United States,
`435 U.S. 679 (1978) ...................................................................................... 78, 79
`NCAA v. Alston,
`141 S. Ct. 2141 (2021) ....................... 66, 81, 82, 84, 86, 87, 88, 89, 90, 102, 103
`In re NCAA Athletic Grant-In-Aid Cap Antitrust Litig.,
`958 F.3d 1239 (9th Cir. 2020) ................................................................ 37, 84, 98
`New York v. Facebook, Inc.,
`— F. Supp. 3d —, 2021 WL 2643724 (D.D.C. June 28, 2021) ......................... 63
`Newcal Indus., Inc. v. IKON Office Solution,
`513 F.3d 1038 (9th Cir. 2008) ................................................................ 43, 45, 46
`Novell, Inc. v. Microsoft Corp.,
`731 F.3d 1064 (10th Cir. 2013) .................................................................... 59, 63
`O’Bannon v. NCAA,
`802 F.3d 1049 (9th Cir. 2015) ................................. 31, 77, 80, 81, 82, 85, 97, 99
`Oahu Gas Serv., Inc. v. Pac. Res. Inc.,
`838 F.2d 360 (9th Cir. 1988) ........................................................................ 76, 91
`Ohio v. Am. Express Co.,
`138 S. Ct. 2274 (2018) ........ 21, 41, 42, 50, 51, 52, 67, 70, 71, 72, 73, 74, 79, 86,
` ............................................................................................................. 98, 106, 109
`Oliver v. SD-3C LLC,
`751 F.3d 1081 (9th Cir. 2014) ............................................................................ 61
`
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`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`
`Oltz v. St. Peter’s Cmty. Hosp.,
`861 F.2d 1440 (9th Cir. 1988) ............................................................................ 68
`Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc.,
`555 U.S. 438 (2009) ............................................................................................ 62
`People’s Choice Wireless, Inc. v. Verizon Wireless,
`131 Cal. App. 4th 656 (2005) ........................................................................... 108
`Perma Life Mufflers, Inc. v. Int’l Parts Corp.,
`392 U.S. 134 (1968) ............................................................................................ 60
`Plush Lounge Las Vegas v. Hotspur Resorts Nevada,
`371 F. App’x 719 (9th Cir. 2010) ....................................................................... 40
`Procaps S.A. v. Patheon, Inc.,
`845 F.3d 1072 (11th Cir. 2016) .......................................................................... 58
`PSI Repair Servs., Inc. v. Honeywell, Inc.,
`104 F.3d 811 (6th Cir. 1997) ........................................................................ 46, 47
`Rebel Oil Co. v. Atl. Richfield Co.,
`51 F.3d 1421 (9th Cir. 1995) ............................................................ 50, 51, 52, 54
`Rick-Mik Enters., Inc. v. Equilon Enters. LLC,
`532 F.3d 963 (9th Cir. 2008) ........................................................................ 92, 93
`Ross v. Citigroup, Inc.,
`630 F. App’x 79 (2d Cir. 2015) .......................................................................... 38
`Rothery Storage & Van Co. v. Atlas Van Lines, Inc.,
`792 F.2d 210 (D.C. Cir. 1986) ............................................................................ 87
`Roy B. Taylor Sales, Inc. v. Hollymatic Corp.,
`28 F.3d 1379 (5th Cir. 1994) .............................................................................. 51
`Russian River Watershed Prot. Comm. v. City of Santa Rosa,
`142 F.3d 1136 (9th Cir. 1998) ............................................................................ 55
`Smith v. Marsh,
`194 F.3d 1045 (9th Cir. 1999) ............................................................................ 78
`
`
`
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`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`
`SMS Sys. Maint. Servs., Inc. v. Digital Equip. Corp.,
`188 F.3d 11 (1st Cir. 1999) ................................................................................. 47
`Snapkeys, Ltd. v. Google LLC,
`No. 19-CV-2658, 2020 WL 6381354 (N.D. Cal. Oct. 21, 2020) ..................... 108
`Sonner v. Premier Nutrition Corp.,
`971 F.3d 834 (9th Cir. 2020) .................................................................... 110, 111
`Sullivan v. NFL,
`34 F.3d 1091 (1st Cir. 1994) ............................................................................... 89
`Tarrant Serv. Agency v. Am. Standard, Inc.,
`12 F.3d 609 (6th Cir. 1993) ................................................................................ 44
`Thurman Indus., Inc. v. Pay ’N Pak Stores, Inc.,
`875 F.2d 1369 (9th Cir. 1989) ...................................................................... 39, 43
`Tompkins v. 23andMe, Inc.,
`840 F.3d 1016 (9th Cir. 2016) ............................................................................ 32
`Toscano v. Pro. Golfers Ass’n,
`258 F.3d 978 (9th Cir. 2001) .............................................................................. 60
`TransUnion LLC v. Ramirez,
`141 S. Ct. 2190 (2021) .............................................................................. 102, 103
`Verizon Commc’ns Inc. v. Law Offs. Of Curtis V. Trinko, LLP,
`540 U.S. 398 (2004) ...................................................................................... 83, 91
`United States v. Am. Express Co.,
`838 F.3d 179 (2d Cir. 2016) ............................................................................... 51
`United States v. Dentsply,
`399 F.3d 181 (3d Cir. 2005) ............................................................................... 52
`United States v. Engelhard Corp.,
`126 F.3d 1302 (11th Cir. 1997) .......................................................................... 40
`United States v. Gen. Motors Corp.,
`384 U.S. 127 (1966) ............................................................................................ 37
`
`
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`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`
`United States v. Microsoft Corp.,
`253 F.3d 34 (D.C. Cir. 2001) ............................................................ 45, 50, 64, 96
`United States v. U.S. Gypsum Co.,
`333 U.S. 364 (1948) ............................................................................................ 56
`United States v. Westinghouse Elec. Corp.,
`648 F.2d 642 (9th Cir. 1981) .................................................................. 61, 62, 63
`United States v. Yacoubian,
`24 F.3d 1 (9th Cir. 1994) .................................................................................... 32
`Valley Drug Co. v. Geneva Pharm., Inc.,
`344 F.3d 1294 (11th Cir. 2003) .......................................................................... 65
`Viazis v. Am. Assoc. of Orthodontists,
`314 F.3d 758 (5th Cir. 2002) ............................................................................ 108
`Wilcox v. First Interstate Bank of Oregon, N.A.,
`815 F.2d 522 (9th Cir. 1987) .............................................................................. 72
`WildEarth Guardians v. EPA,
`759 F.3d 1064 (9th Cir. 2014) ............................................................................ 84
`Yazzie v. Hobbs,
`977 F.3d 964 (9th Cir. 2020) ............................................................................ 103
`Yu v. Idaho State Univ.,
`15 F.4th 1236 (9th Cir. 2021) ............................................................................. 37
`Yukon Recovery, L.L.C. v. Certain Abandoned Prop.,
`205 F.3d 1189 (9th Cir. 2000) ...................................................................... 78, 86
`Zalkind v. Ceradyne, Inc.,
`194 Cal. App. 4th 1010 (2011) ......................................................................... 113
`STATUTES
`15 U.S.C. § 1 .....................................................................................................passim
`15 U.S.C. § 2 .....................................................................................................passim
`Cal. Bus. & Prof. Code § 17200 ................................................................................ 6
`xiii
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`TABLE OF AUTHORITIES
`(continued)
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`Page(s)
`
`Cal. Bus. & Prof. Code § 17535 ............................................................................ 109
`Cal. Civ. Code § 382 .............................................................................................. 110
`OTHER AUTHORITIES
`Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law (4th ed. 2021) ................ 64
`Dep’t of Justice & Fed. Trade Comm’n, Antitrust Guidelines for the
`Licensing of Intellectual Property (2017)........................................................... 63
`Erika Douglas, Data Privacy Protection as a Procompetitive
`Justification, Antitrust Mag. (Dec. 2021) ........................................................... 80
`David S. Evans & Richard Schmalensee, Markets with Two-Sided
`Platforms, 1 Issues in Competition L. & Pol’y 667 (2008) ................................ 11
`David S. Evans & Richard Schmalensee, Matchmakers: The New
`Economics of Multisided Platforms (Harv. Bus. Rev. Press 2016). ............... 7, 41
`Herbert Hovenkamp et al., IP and Antitrust (3d ed. 2021) ..................................... 64
`Herbert Hovenkamp, The NCAA and the Rule of Reason, 52 Rev.
`Indus. Org. 323 (2016) ........................................................................................ 88
`
`South Korea Approves Rules on App Store Law Targeting Apple,
`Google, Reuters (Mar. 8, 2022), https://tinyurl.com/ydknbxyr .......................... 99
`William L. Stern, Business & Professions Code Section 17200
`Practice (updated March 2021) ........................................................................ 105
`
`
`
`
`
`xiv
`
`

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`Case: 21-16506, 03/24/2022, ID: 12404491, DktEntry: 93, Page 16 of 135
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`INTRODUCTION
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`Epic did not lose the trial due to any legal error. Epic lost because it
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`“overreached” (1-ER-182) by asserting claims on the “frontier edges of antitrust
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`law” (3-ER-518). Epic’s accusations of anticompetitive conduct were not just
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`unprecedented but unfounded. Epic built its case on witnesses who “lack[ed]
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`credibility” and were “unreliable,” whose testimony was “wholly lacking in an
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`evidentiary basis,” and who were “willing to stretch the truth in support of [Epic’s]
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`desired outcome.” 1-ER-53; 1-ER-59; 1-ER-60; 1-ER-65 n.316. At trial, its theories
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`were revealed to be “artificial,” “misconceived,” and “litigation driven.” 1-ER-48.
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`At every turn, Epic “failed to demonstrate,” “failed to convince,” “failed to
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`produce,” “failed to present,” “failed to show,” “failed to persuade,” and “failed to
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`prove” the facts of its case. 1-ER-53; 1-ER-54; 1-ER-134; 1-ER-140; 1-ER-150;
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`1-ER-155; 1-ER-161.
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`In this Court, Epic tries to change the narrative because it can show no clear
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`error in the decision below. Epic caricatures the court’s 180-page opinion and
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`reduces the robust evidentiary record to a handful of misleading and out-of-context
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`quotations. Epic ignores the deferential standard of review applicable to the court’s
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`factual findings, on which every one of its antitrust theories foundered. Epic also
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`refuses to acknowledge that the court applied settled precedent from the Supreme
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`Case: 21-16506, 03/24/2022, ID: 12404491, DktEntry: 93, Page 17 of 135
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`Court and this Court on every material point. On the facts and the law, the court
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`correctly decided every issue presented in Epic’s appeal.
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`This litigation arose out of Epic’s coordinated global crusade, dubbed “Project
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`Liberty,” through which Epic seeks to influence courts, regulators, and legislators to
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`fundamentally change Apple’s App Store so that Epic can make more money selling
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`virtual currency to gamers. Epic challenged two specific limitations that Apple
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`implemented over a decade ago: The requirement that all native iOS apps developed
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`using Apple’s proprietary software be distributed through the App Store, and the
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`requirement that transactions in digital content within such apps use Apple’s “IAP”
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`functionality. The objective of this lawsuit “[f]irst and foremost” was to obtain
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`“tremendous monetary gain and wealth” for Epic (1-ER-22), a multi-billion-dollar
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`software developer that earned over $700 million from its game Fortnite in less than
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`two years on the App Store.
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`Epic promised “war” against Apple and conducted the ensuing campaign
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`dishonorably. Epic “decided it would rush to court with its own plan to protect its
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`self-avowed interests” (1-ER-27), and intentionally broke Apple’s rules using
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`deception and sabotage. Epic then held its own customers hostage in an effort to
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`gain a litigation advantage and orchestrated a media blitz designed to shift the blame
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`to Apple. 1-ER-25–28. Epic could not, however, make good on its accusations.
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`Case: 21-16506, 03/24/2022, ID: 12404491, DktEntry: 93, Page 18 of 135
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`Epic had the burden to prove, among other things, that the challenged
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`limitations were unreasonable restraints of trade under a framework the parties
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`agreed on before trial began. After a 16-day bench trial, the district court found that
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`Epic had failed to carry its burden of proof on every one of its antitrust claims. That
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`should not surprise: Throughout the history of the