Epic’s challenge to Apple App Store draws support from 35 US states


The bipartisan group of attorneys general filed arguments on Jan 27 backing Epic Games Inc’s appeal of a September ruling that left the iPhone maker’s lucrative App Store business model largely intact. — AFP

A judge’s ruling that Apple Inc’s dominance of the market for mobile apps doesn’t violate US antitrust law was based on a faulty analysis and should be reversed, 35 states said in a court filing.

The bipartisan group of attorneys general filed arguments on Jan 27 backing Epic Games Inc’s appeal of a September ruling that left the iPhone maker’s lucrative App Store business model largely intact. The maker of the popular Fortnite game also picked up support from 38 law, economics and business professors, a consumer advocacy group, a cyber-civil liberties organisation and Microsoft Corp.

The US Justice Department also weighed in to say the ruling was flawed while declining to take a position on the merits of Epic’s dispute with Apple.

Apple faces a number of antitrust lawsuits in and outside the US seeking to open up the App Store to competition. Apple is also contending with monopolisation enforcement investigations brought by federal and state agencies, and legislative bids to restrict its business practices.

“We’re optimistic that the ruling will be affirmed on appeal, and that Epic’s challenge will fail,” an Apple spokesperson said in statement. “We remain committed to ensuring the App Store is a safe and trusted marketplace for consumers and a great opportunity for developers.”

Following a trial in May, US District Judge Yvonne Gonzalez Rogers in Oakland, California, mostly sided with Apple, turning away Epic’s claims that the App Store is run like a monopoly. She rejected the need for third-party app stores and didn’t force Apple to lower the store fees it charges to app developers.

In Thursday’s filing, the states said Gonzalez Rogers’ ruling that Apple lacked monopoly power isn’t consistent with antitrust law and failed to properly weigh the effects of Apple’s conduct that thwarts and supports competition.

“As Epic points out, Apple amassed billions in supracompetitive profits from one billion iPhone users,” the attorneys general said. “Without balancing, this type of immense harm to consumers can go unanswered with just the slightest showing of procompetitive benefit.”

The Justice Department said in its filing that two provisions of the Sherman Act, a central pillar of federal antitrust law, were misapplied by the judge “in ways that would leave many anticompetitive agreements and practices outside their protections”.

“The district court committed several legal errors that could imperil effective antitrust enforcement, especially in the digital economy,” according to the filing. – Bloomberg

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