Epic and Apple’s Interpretation Challenges Justice Department’s Investigation into Apple’s App Store Practice

Following a decision Friday in Apple’s lawsuit against Epic, Apple’s lawsuit has become a difficult task for U.S. Justice Department officials investigating the company over App Store practices.

The Justice Department’s investigation into Apple’s App Store practice began during the Trump administration. The Biden administration is continuing this investigation. Friday’s decision does not overturn the Justice Department’s case, but poses new challenges because, according to District Judge Yvonne Gonzalez Rogers, who presided over the Epic v. Apple case, Epic failed to prove that Apple violates a federal law (Sherman Act) that targets monopolies.

According to a competition lawyer unrelated to the Justice Department case, “Apple has largely won all claims under Sherman’s law.” However, President Biden has appointed a number of critics of high technology to key positions of power. In an executive order in July, he said he would fight online platforms accused of using “the power to exclude market entry, extract monopolistic profits and collect intimate personal data.” Separately, Democratic and Republican lawmakers have reached a sort of bilateral agreement that would support legislation that would give antitrust forces their teeth to bite and impose rules like Apple and Google.

According to Judge Gonzalez Rogers, Apple is not illegally monopolizing the market. The judge also dismissed Epic’s case of Apple illegally restricting trade, a key element of federal competition law. In addition, Judge Gonzalez Rogers said Apple’s restrictions on developers are justified to protect security. She also mentioned that the market is two-sided. As prescribed by the framework established in the decision of the US Supreme Court from 2018, this represents the difficult task of the Ministry of Justice to prove that the harm on the one hand (consumers) outweighs the benefits on the other hand (Apple, App Store).

According to experts on these topics, if the interaction of developers and consumers is a two-way market, the Ministry of Justice cannot just prove harm to developers or harm only to consumers and stop it. It would have to somehow prove the net damage to all the different groups that communicate via the platform (in this case the App Store).

Our Take

We believe the Department of Justice didn’t lose the case before it began, but it might have been harder for him to prove his point, given how the judge took up Apple’s business practice in the context of Epic’s lawsuit against Apple. Let us know what you think in the comments below. Did the Epic v. Apple verdict complicate the Justice Department’s investigation?

[Via Bloomberg]

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Naveen Kumar

Friendly communicator. Music maven. Explorer. Pop culture trailblazer. Social media practitioner.

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