Saturday, August 27, 2022

United States v. Apple could expand and improve upon Epic Games v. Apple: DOJ preparing potential antitrust lawsuit over Cupertino's strangehold on iOS ecosystem

Based on what Bloomberg reported earlier this month, a second United States v. Google antitrust lawsuit could be filed in the coming weeks and focus on Google's ads business. The first Google case--which was brought by the Trump Administration--is going to get more interesting in the fourth quarter, and I plan to talk about it more. So far I've just commented on a discovery order.

There are serious issues concerning Google, but what Apple is doing is actually a lot worse--both in terms of conduct and impact. The Biden Administration appears to be perfectly aware of the pressing need to take action against the iPhone maker. In a major scoop, Politico's Josh Sisco reports that Apple faces a growing likelihood of a DOJ antitrust lawsuit, possibly before yearend. Apple's App Store terms and practices are part of the consideration, but potentially the DOJ could challenge Apple's control over its devices beyond app distribution, with Tile being a key complainant that makes hardware (tracking devices).

What's not mentioned is App Tracking Transparency (ATT). I very much hope the DOJ will tackle that abusive and pernicious scheme, too. It affects the wider economy to a far greater extent than Tile's plight, though Tile does have valid reasons to complain.

Josh Sisco's article recalls something his colleague Leah Nylen already mentioned in September: the fact that DOJ attorneys attended very single day of last year's Epic Games v. Apple trial. I must admit I wasn't aware of that.

In January, the DOJ filed an amicus curiae brief in Epic Games v. Apple, and as I explained then, it was a pro-Epic brief even though it was formally filed "in support of neither party." Every single point the DOJ made was beneficial to Epic and, therefore, prejudicial to Apple. The DOJ's brief is all about ways in which Epic can satisfy various legal requirements that would, at the end of the day, result in a reversal of the federal antitrust part of the district court's decision.

What will the DOJ on October 21, the day of the Epic Games v. Apple appellate hearing in the United States Court of Appeals for the Ninth Circuit?

The DOJ could still ask to be allowed to deliver oral argument. It's the last hearing of the day, and I believe the Ninth Circuit would accomodate that request. But it may also just listen in order to obtain valuable insights as it prepares its own complaint.

As Josh Sisco notes, Judge Yvonne Gonzalez Rogers didn't rule out that another plaintiff than Epic could achieve more. And indeed, at trial and in her decision she sometimes reminded Epic of the fact that it's not a government plaintiff. Given the unbelievable flaws of that ruling, which I mentioned again in my post on the hearing date, I actually think she should be reversed anyway. But it is true that the federal government would have certain advantages if it sued over the same--and even some additional--issues.

I still keep my fingers crossed that Congress will vote on the Open App Markets Act (OAMA) during this term. Should the American Innovation and Choice Online Act (AICOA) be too controversial, going forward with the OAMA may be a pragmatic decision. It's unfortunate that Majority Leader Schumer seeks to shield Big Tech from reasonably strong antitrust enforcement, but if at least the OAMA could be passed into law, that would have tremendous value in itself and might resolve some of the issues the DOJ would otherwise have to address through litigation.

So there's really an interdependent triangle here between the DOJ's contemplated antitrust lawsuit on behalf of the United States of America, the OAMA, and the Epic Games v. Apple appeal. Josh Sisco notes that the DOJ may want to see the actual Epic Games v. Apple decision. In that case, however, it couldn't keep its timeline and still file in 2022. I believe the appeals court's inclination will be discernible at the October 21 hearing--and the Ninth Circuit most likely won't have the last word as the losing side will be sure to file a petition for writ of certiorari with the Supreme Court, which--unless it grants the petition straight away--would most likely issue a CVSG: a call for the views of the Solicitor General.

That's the fourth-highest-ranking official of the DOJ.