Epic Derides Apple’s Motion for Stay of Mandate in Antitrust Appeal

Late last week, Epic Games Inc. opposed Apple Inc.’s motion for a stay pending appeal of the Northern District of California court’s injunction requiring Apple to eliminate its App Store’s anti-steering provisions. Epic argues that Apple has not shown that it is entitled to a stay and that it actually celebrated the court’s ruling and injunction as a “resounding victory,” but has since changed its tune.

Two weeks ago, Apple asked Judge Gonzalez Rogers to stay enforcement of the injunction she imposed on September 10 until the Ninth Circuit resolves the appeals filed by both Epic and Apple. In its motion, Apple contended that the court’s conclusion about its anti-steering provision was a stretch as Epic presented no evidence that the rules restricting communications between app developers and consumers caused it harm. Apple also asserted that it would face irreparable harm if the injunction took effect because it would have to permit developers to engage in conduct disruptive to its business model.

Epic counters that “[b]ased on the ample evidence at trial of the harm to consumers and developers and Apple’s unwillingness to change without legal action, Apple’s plea that the Court trust Apple to fix the problem on its own should be rejected.” The defendant failed to demonstrate irreparable harm, Epic contends, first noting that its motion for a stay is “entirely inconsistent with its post-decision statements,” citing comments by the company’s general counsel and CEO. Epic puts forth several other contentions, including that Apple argues that harm will occur to third-parties, not itself, makes assertions unsupported by the trial record or ones that contradict it, and inappropriately seeks to supplement the record.  

Epic contends that Apple is unlikely to succeed on the merits because “[n]one of the purported errors asserted by Apple is likely to cause the Ninth Circuit to modify or vacate the injunction.” Its argument is threefold: first, Epic alleges that it continues to have standing, second, that it proved a violation of California’s Unfair Competition Law, and third, that the injunction is within the ambit of the court’s equitable powers.

Epic also claims that it will be harmed financially and irrecoverably should the court grant a stay because it would allow Apple to continue charging a supracompetitive rate for in-app purchases. Too, Epic argues, the public interest factors weigh in favor of denying the request. The injunction increases competition, transparency, and consumer choice and information on a platform those things have been proactively smothered for more than a decade, the motion contends.

Apple’s reply is due Friday, and the motion hearing is scheduled for November 16 in Oakland, California.

Faegre Drinker Biddle & Reath LLP and Cravath, Swaine & Moore are counsel for Epic Games, and Gibson, Dunn & Crutcher LLP is counsel for Apple.