Tuesday, September 15, 2020

Epic Games prefers Play Store antitrust trial to take place in San Francisco, Google in San Jose

Epic Games v. Google is still in the very early stages. Three of the Google entities sued by the Fortnite maker are based overseas. As a result, service of process took longer: Google Asia Pacific Pte. Limited was served on September 4, 2020; Google Ireland Limited on September 6, 2020; and what procedurally matters is the latest date, September 7, 2020 (when Google Ireland Limited was served).

By contrast, there's already been a fair amount of activity in Epic Games v. Apple, with a temporary restraining order (TRO) in place, Epic having brought a motion for a preliminary injunction (consistent with its TRO motion), to which Apple will respond later today. Apple meanwhile filed its answer to Epic's complaint. It may take quite a while before Google does so, especially since it appears to intend to firstly bring a motion to dismiss.

Other than service, all that has happened so far in Epic v. Google is about the assignment of the case to one judge or another, and about whether or not Epic's case is related to some other antitrust actions against Google in the same district. That's obviously less exciting than motions for injunctive relief, but those little things can make all the difference to the outcome of a litigation. For example, if Oracle's Android-Java copyright case against Google had not been assigned to Judge William H. Alsup back in 2010, it's highly likely Google would already have lost it a long time ago, and a jury would merely have had to determine damages for past infringement while the merits were crystal clear (except to that one judge).

What Google didn't want--and what it's been able to avoid--was for Epic's Android case to be related to (i.e., procedurally combined with) Epic's case against Apple. In that case, the existence of earlier-filed cases against Apple (especially the 2011 Pepper case) would have resulted in a very ambitious schedule. It's preferable for Google to slow things down (whether those efforts will be tantamount to "stalling" remains to be seen), and to firstly await the outcome of the Apple cases (should Apple prevail, Google will argue it should be let off the hook; otherwise Google will place even greater emphasis on differences between its Play Store terms and Apple's App Store terms).

Judge James Donato in San Francisco did, however, procedurally combine Epic v. Google with a couple of class actions over the Play Store (Carr v. Google and Pure Sweat Basketball v. Google). Those other cases were filed in mid-August, and the overlap of issues was strong and clear.

On Wednesday, Google brought a motion asking the court to consider whether those Play Store cases should be related to Feitelson v. Google, a consumer antitrust case that was dismissed by Judge Beth Freeman in San Jose back in 2015 (this post continues below the document):

20-09-09 Google Motion to C... by Florian Mueller

Given that Feitelson v. Google is a case that went nowhere and was closed a long time ago, the only practical effect that it would have to consider those cases "related" is that it would be a vehicle for Google to get the case transferred, within the same federal district, from San Francisco to San Jose--and from Judge Donato (who based on what some lawyers practicing in that district say is not the most popular judge in the Bay Area) to Judge Freeman.

When reading Google's motion, I got the impression that Google's lawyers know there isn't an extremely pressing reason for combining those cases. It's more like Google would have a preference--and asking is free (apart from legal fees in this case). Logistics formally play a role, but with so much at stake, all that Google cares about is the chances of one outcome over another. With so many San-Francisco-to-Silicon-Valley commuters, it's hard to tell where the pool of potential jurors would be more likely to be sympathetic to Google; and Epic doesn't even want a jury to be involved, though Google could potentially bring counterclaims that would involve damages and request a jury trial. So Google's preference is all about the judge in the end.

The fact that Judge Freeman granted a motion by Google to dismiss an Android antitrust case more than half a decade ago is presumably the reason why Google would like to bring the next motion of this kind in her court, too. Also, both Judge Donato and Judge Freeman are among the numerous Obama appointees in that district, so there's probably not much of an ideological difference.

But there really are fundamental differences between those cases. The theory of harm in Feitelson was that consumers paid more for their Android phones than they'd have had to if Google had allowed Android device makers to take money from other search engines and if those OEMs had in turn lowered their prices. Google's Mobile App Distribution Agreements (MADAs) with device makers are at issue either way, but as we all know, Epic isn't seeking to compete with Google on search, nor does Epic want to pay less for an Android phone. Epic just wants more than 70% of the in-app purchasing (IAP) revenues it generates, and believes that the way to bring down Google's cut is to allow alternative in-app payment services.

Given those major differences between the current Play Store cases and the defunct mobile search case (even though "Android" and "antitrust" are common buzzwords), Google may overestimate the likelihood of Judge Freeman granting another motion to dismiss. Who knows, maybe Judge Donato would actualy be more inclined to do in this case. Not only Google but also Epic apparently feels that the Feitelson past may be an indication of Judge Freeman being less willing than the average other district judge to consider the Android business model anticompetitive. That's why Epic is opposing Google's motion (this post continues below the document):

20-09-14 Epic Opposition to... by Florian Mueller

What's going to happen now depends on Judge Freeman. If she wants those three new Android antitrust cases, even the thin connection--which Google overstates to a greater extent than Epic downplays it--would be more than sufficient for her to take over. Judge Donato simply assigned one of those newer cases (Carr) to himself, taking it away from Judge Freeman (which doesn't necessarily mean she was disappointed, much less that he was being rude). But the fact that the Feitelson case is so old means Judge Freeman has the choice. We'll see how interested she is in this stuff.

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