By Drew Apperson

 

In a 2020 blog post, I summarized some of the issues between Fortnite developer, Epic Games, Inc., and the respective app markets of Apple and Google. The feud lead to the then-pending lawsuit between Epic Games, Inc. and Apple, Inc. concerning allegedly anticompetitive policies of the App Store.[1] In September of last year, the United States District Court for the Northern District of California ruled in Apple’s favor.[2] However, Apple and Google are far from being in the clear.

In dismay of the District Court’s holding, “[n]early 40 law, business and economics academics” filed an amicus brief in the Court of Appeals for the Ninth Circuit this past January “arguing the [district court] judge wrongly accepted Apple’s justifications that restrictions on third-party app distribution are necessary to protect users.”[3] The brief hit on various flaws it saw in the District Court’s analysis, such as:

[T]he court could have concluded that, on balance, Apple’s restraints were anticompetitive. Short-circuiting the analysis at an earlier stage prevented the court from assessing the ultimate competitive effects under the Rule of Reason, as courts have done for the past 45 years. The court erred in not balancing harms and benefits.[4]

Meanwhile, the federal legislature has simultaneously been working to combat anticompetitive policies in app markets. The United States Senate’s introduced Bill 2710, Open App Markets Act, on August 11, 2021, The Congressional Research Service’s bill summary described the bill as follows:

The bill prohibits a covered company from (1) requiring developers to use an in-app payment system owned or controlled by the company as a condition of distribution or accessibility, (2) requiring that pricing or conditions of sale be equal to or more favorable on its app store than another app store, or (3) taking punitive action against a developer for using or offering different pricing terms or conditions of sale through another in-app payment system or on another app store.

A covered company may not interfere with legitimate business communications between developers and users, use non-public business information from a third-party app to compete with the app, or unreasonably prefer or rank its own apps (or those of its business partners) over other apps.[5]

Just last week at the Global Privacy Summit in Washington, D.C., Apple CEO, Tim Cook, was reported as “slamming” the proposed legislation, arguing that unvetted apps would cause profound results, such as developers circumventing Apple’s privacy rules and putting users at risk.[6] The bill for the Open App Markets Act cleared the Senate Judiciary Committee earlier this year.[7]

As the threat of private suits continue, and as the Congressional bill continues to progress, Apple’s App Store and Google’s Play Store will likely remain under the microscope for the foreseeable future.

 

[1] Drew Apperson, An Epic Apple Fight, Rich. J.L. & Tech. Blog (Dec. 25, 2020), https://jolt.richmond.edu/2020/12/25/an-epic-apple-fight/.

[2] Epic Games, Inc. v. Apple Inc., No. 4:20-cv-05640-YGR, 2021 U.S. Dist. LEXIS 172303 (N.D. Cal. Sep. 10, 2021).

[3] Bryan Koenig, Apple Can’t Hide Behind Privacy In Epic Fight, 9th Circ. Told, Law360 (Jan. 27, 2022, 7:17 PM), https://www.law360.com/articles/1459311.

[4] Brief of Amici Curiae: Law, Economics, and Business Professors in Support of Appellant/Cross-Appellee at 38, Epic Games, Inc. v. Apple, Inc., No. 21-16695 (9th Cir. Jan. 27, 2022).

[5] S.2710 – 117th Congress (2021-2022): Open App Markets Act, S.2710, 117th Cong. (2022), https://www.congress.gov/bill/117th-congress/senate-bill/2710.

[6] Ben Kochman, Apple CEO Claims Antitrust App Store Laws Will Hurt Privacy, Law360 (Apr. 12, 2022, 8:27 PM EST), https://www.law360.com/ip/articles/1482972/apple-ceo-claims-antitrust-app-store-laws-will-hurt-privacy.

[7] S.2710 – 117th Congress (2021-2022): Open App Markets Act, S.2710, 117th Cong. (2022), https://www.congress.gov/bill/117th-congress/senate-bill/2710.

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