Monday, February 22, 2021

UK competition court doesn't doubt the merits of Epic Games' antitrust injunction claims against Apple, Google--just forum non conveniens for Apple's U.S. corporate parent

As MLex's Lewis Crofts mentioned on Twitter, Fortnite and Unreal Engine maker Epic Games

At this stage, the UK court had to make a purely procedural decision: whether or not Epic's complaints should be served on non-UK-based entities Epic wanted to sue in the UK. The court has no problem with service on UK-based Apple and Google entities, and even some Ireland-based (not UK, but EU) Google entities as far as Epic is seeking injunctions against them. With respect to those Irish entities, what helped Epic is timing: it filed before Brexit took effect.

The ideal outcome for Apple and Google would have been if the court had held that there was no "serious issue to be tried." That would have been comparable to an outright dismissal of a case not well pled. No such deficiency was identified here with respect to the injunctions Epic is seeking--just with respect to mere declarations of breach. The court furthermore evaluated whether Epic had "gateways" (reasons for which to bring cases against non-UK entities in the UK). But what ultimately did result in the dismissal of U.S.-based Apple Inc. from the case is simply that the British court determined the Northern District of California was the forum conveniens, and that, at a minimum, London wasn't a better choice.

The court also held that some of its claims didn't entitle Epic to sue certain non-UK Google entities in the UK, but the remaining claims ("claims for breach of the Chapter I and Chapter II prohibitions under the CA 1998 as regards the alleged 'Restrictive Terms' in the DDA and the removal of Fortnite from the Google Play Store") still give Epic a potential path to victory there. The court determined that "there is no issue to be tried as regards the claims for the two declarations in the Apple and Google actions" (also noting that "it may be unfortunate that declaratory relief is not included as a remedy available in the [Competition Appeal] Tribunal").

In the Unwired Planet patent case, the UK Supreme Court actually took a very permissive approach to forum conveniens, holding that even if a smartphone maker generated only 1% of its worldwide sales in the UK, a UK court might nevertheless set a worldwide royalty rate for a standard-essential patent portfolio, and if the defendant didn't agree to a license deal on those terms, it would face a UK-wide sales ban. Here, however, a UK court exercised restraint in jurisdictional terms.

Even if Epic had received the go-ahead today to sue Apple Inc. in London, a decision in the UK would still have taken longer than the California case, in which the trial is only a few months away. The discovery cutoff date in the U.S. case was one week ago.

Today's UK decision doesn't help Google in any way, nor does it solve Apple's real problem, which is that its App Store monopoly is under pressure in multiple jurisdictions.

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