Epic vs. Apple Ruling Poses Challenges for Justice Department’s Probe into Apple’s App Store Practices

BY Chandraveer Mathur

Published 13 Sep 2021

App Store on iPhone Home screen

Following Friday’s decision in the Apple v. Epic lawsuit, suing Apple has become an uphill task for the US Justice Department officials investigating the company over App Store practices.

The Justice Department probe into Apple’s App Store practices began during the Trump administration’s era. The Biden administration is proceeding with this investigation. Friday’s decision doesn’t nullify the Justice Department’s case but poses new challenges since according to District Judge Yvonne Gonzalez Rogers who presided over the Epic v. Apple case, Epic failed to establish that Apple violates federal law (Sherman Act) targeting monopolies.

According to an antitrust lawyer not associated with the Justice Department’s case, “Apple pretty much got a flat-out victory on all the Sherman Act claims.” However, President Biden has appointed numerous Big Tech critics in key positions of power. In an executive order in July, he said he would combat internet platforms accused of using “power to exclude market entrants, to extract monopoly profits, and to gather intimate personal information.” Separately, Democratic and Republican lawmakers have arrived at a bipartisan agreement of sorts to back legislation that would give antitrust enforcers the teeth to bite and impose rules on the likes of Apple and Google.

According to Judge Gonzalez Rogers, Apple isn’t illegally monopolizing the market. The judge also dismissed Epic’s case that Apple is unlawfully restraining trade, a critical element of the federal antitrust law. Additionally, Judge Gonzalez Rogers said that Apple’s restrictions on developers are justified to protect security. She also noted that the market is two-sided. As mandated by a framework established in a 2018 US Supreme Court decision, this presents the Justice Department with an uphill task of proving that the harms to one side (consumers) outweigh the benefits to the other (Apple, App Store).

According to a subject matter expert, if the app developer-consumer interaction is a two-sided market, the Justice Department can’t just prove harm to developers or harm to just consumers and call it a day. It would have to somehow prove net harm across all the different groups that interact through the platform (in this case the App Store).

Our Take

We believe that the Justice Department hasn’t lost the case before it began but could have a harder time proving its point, given the judge’s take on Apple’s business practices in the context of the Epic v. Apple suit. Let us know what you think in the comments below. Has the Epic v. Apple ruling made things harder for the Justice Department’s inquiry?

[Via Bloomberg]