Friday, September 4, 2020

Google announces motion to dismiss Epic's antitrust complaint over Android/Play Store, opposes combining both Epic app store cases

One of this blog's most popular posts in 2020 has been my recent comparison of the legal and factual questions raised by Fortnite maker Epic Games' near-simultaneously-filed antitrust complaints against Apple and Google in the Northern District of California, not least thanks to Techmeme featuring it.

The short version is that in case Epic's lawyers had a "divide and conquer" strategy in mind against Apple and Google by bringing separate lawsuits in the same district within hours of each other, the Android maker agrees in procedural terms and doesn't want Epic v. Google to be lumped together with Epic v. Apple. And on this occasion, its lawyers just announced that Google would bring a motion to dismiss Epic's complaint, which--if successful and upheld on appeal--would end Epic's Android case before it really begins. It is not known, but we will see shortly, whether Apple also intends to shoot down Epic's complaint at the earliest procedural stage, but Judge Yvonne Gonzalez Rogers said at a recent hearing that the case wasn't a slam dunk for Apple or Epic, which strongly suggests she's certain it will go to trial (next year, as the case is on an expedited schedule).

There's already been a flurry of activity already in Epic v. Apple, with Judge Gonzalez Rogers having denied an Epic motion for a temporary restraining order (TRO) over the removal of Fortnite from the App Store but having granted it so Epic would, for the time being, retain access to Apple's developer tools with a view to the iOS and Mac versions of Unreal Engine.

In the Google case, however, I was still waiting for lawyers to appear on the search company's behalf (for a reminder, Epic is represented by Cravath and Apple by Gibson Dunn). A couple of hours ago (Thursday evening Pacific Time), Morgan Lewis's Brian Rocca, a leading California antitrust attorney and managing partner of Morgan Lewis's San Francisco office, made a filing on Google's behalf in response to a judge's question whether the very recently-filed Pure Sweat Basketball v. Google case (a class action complaint on behalf of Android app developers) is related to Epic v. Google, Epic v. Apple, and Cameron v. Apple, a class action complaint on behalf of iOS app developers against Apple (this post continues below the document):

20-09-03 Google Opposing Co... by Florian Mueller

The key takeaways from the above filing are the following:

  • Google is in favor of combining any Android/Play Store antitrust cases. Those cases are the aforementioned Pure Sweat Basketball case, but also another case, Carr v. Google, which is presently pending before a judge in San Jose.

  • Google does not want the Android and iOS cases to be merged.

  • One part of Google's argument against combination is procedural: they argue that the cases are at different stages of proceeding, given that a consumer class action against Apple, Pepper v. Apple (the one that went up to the Supreme Court), has already been ongoing since 2011, while the Google cases (apart from Feitelson v. Google, which was dismissed in 2015) were brought in August. The complaints against Google involve foreign entities, such as Google Ireland Ltd. and Google Asia Pacific Pte. Ltd., which is why Google hasn't even been served with Epic's complaints yet.

    In this regard, what Google presumably wants to avoid is that Epic v. Google would be put on a very ambitious schedule just like Epic v. Apple. If the Google cases continue to be kept separate, it's much less likely that Epic would already get its day in court against the Android maker next year. Actually, Judge Gonzalez Rogers might have to modify her schedule in the various Apple App Store cases in order to integrate the Google cases into her set of cases.

  • Google also argues that there's hardly any overlap other than Android and iOS "compet[ing] to attract app developers and end users" (an argument that I predicted from the beginning we'd hear from both Apple and Google). Google's lawyers stress that "Google (through Android) and Apple (through iOS) use different business models, agreements, and policies to support competing ecosystems." As I also predicted, Google argues that Android is less restrictive than iOS. They describe Android as an "open mobile OS" (though the degree of its openness has been the subject of debate, and is at issue in an EU antitrust case) and point to the availability of alternative means to get Android apps on end user's devices (alternatives that Epic argues are commercially insufficient and technically inferior):

    "While Apple's iOS allows the distribution of apps only through Apple’s proprietary app store, Android devices, in contrast: (1) can have multiple app stores simultaneously pre-installed or downloaded and (2) allow for end users to sideload apps via the Internet. That means Android app developers can distribute apps through multiple Android app stores, work directly with OEMs or carriers to preload apps, and distribute apps to users directly from their own websites. As a result, Apple and Google each have their own separate and unique negotiations and contracts with app developers and original equipment manufacturers (OEMs)."

  • It's transparent that Google sees major advantages in having the Apple cases decided first (unless Google succeeds with its motion to dismiss Epic's complaint, of course):

    • If Apple defends itself, Google will argue (at trial and on appeal) that Google is "more open," so it wouldn't make sense for Apple to be let off the hook and Google to be held in violation of competition law. As I noted on a previous occasion, it depends on market definition, but if the courts defined the relevant antitrust markets here as single-brand markets (iOS app distribution or Android app distribution, iOS in-app payment systems vs. Android in-app payment systems) as opposed to a common mobile app market (in which Google has more market share), then Google indeed has more ways to defend itself than Apple.

    • If Apple lost, Google would attribute it to the differences between the two companies' policies and place an even greater emphasis than it would at any rate on Android's purported openness.

  • The following passage is where Google announced to bring a motion to dismiss Epic's complaint:

    "Once served, and only after the initial scheduling is worked out, Google will challenge the complaints, in large part based on circumstances unique to Android, just as it did in Feitelson v. Google, Inc. [...]"

  • At the moment there are multiple federal judges in the Northern District of California before whom one or more app store antitrust cases are pending, and Google's filing mentions them all:

    • Judge Gonzalez Rogers in Oakland is presiding over the various Apple cases. Epic v. Apple was originally assigned to Judge Edward M. Chen in San Francisco, then crossed the Bay Bridge.

    • Judge Chen also received the Pure Sweat Basketball v. Google complaint, which prompted his question whether it should be related to any of the other cases.

    • Epic v. Google was originally assigned to Magistrate Judge Nathanael Cousins in San Jose, but Epic declined to proceed before a magistrate judge, and it was then assigned to Judge James Donato in San Francisco.

    • If Google gets its way and avoids consolidation of the Apple and Google cases while winning (which is a given) the merger of all Play Store cases, it appears most likely to me that Epic v. Google, after taking the 101 North (from Judge Cousins to Judge Donato) will head back south on the same highway to be assigned to Judge Beth Freeman in San Jose. Judge Freeman already adjudicated the Feitelson case years ago, and recently received Carr v. Google, a consumer (not app developer) class action complaint.

      A footnote in Google's filing says the following:

      "Each of the plaintiffs in the recently-filed Android/Google Cases—Epic, Mary Carr, and Pure Sweat Basketball—agreed to litigate disputes with Google 'exclusively” in Santa Clara County, i.e., in the San Jose Division for federal court cases. See Google DDA, §16.8, available at; Google Terms of Service, Section 'Settling disputes, governing law, and courts', available at Judge Freeman is the only judge currently assigned an Android/Google Case (Carr-Google) who presides in the San Jose Division.

      So Google would obviously like to go back to a judge who already dismissed a Play Store case back in 2015--and it would also be geographically more convenient.

Later today (Friday), Epic will file its motion for a preliminary injunction against Apple, raising the same issues as its recent TRO motion.

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