“If embraced by the Ninth Circuit, Epic’s novel theory of antitrust liability would sound the death knell for innovation in America.”
—Cory Andrews, WLF General Counsel & Vice President of Litigation

Click here for WLF’s brief.

WASHINGTON, DC— Washington Legal Foundation (WLF) today urged the U.S. Court of Appeals for the Ninth Circuit to reverse a trial court’s controversial verdict and sweeping injunction in a major antitrust case.

The case arises after Epic chose not to follow its contract with Google. Under that agreement, developers may distribute their Android apps only through Google Play. Developers are also prohibited from steering customers to outside payment processors to make in-app purchases. Google removed Epic’s Fortnite from the App Store when Epic breached its contract. Epic then sued for violations of the Sherman Act. After a jury trial and verdict in Epic’s favor, the District Court entered a sweeping three-year injunction requiring Google to build new features to aid its rivals, including Epic.

In its amicus brief supporting reversal, WLF argues that under prevailing law, a business—even an alleged monopolist—may choose with whom it transacts. Exceptions are rare. The Supreme Court has never endorsed a remedial duty to deal where there is no prior course of dealing. For without a prior course of dealing, there can be no evidence that a particular course would be profitable, no reason to infer that the monopolist’s otherwise lawful refusal was unjustified, and no prior terms to guide the court in determining what terms to impose on competitors. Not only would courts become “central planners”—something antitrust law seeks to avoid—but worse, they would be centrally planning on a blank slate.

WLF’s brief also explains why affirming the District Court here would discourage growth and investment while creating a powerful incentive to free ride on others’ successes. In this highly competitive space, firms are constantly innovating. Imposing new duties to deal with competitors in the digital economy not only threatens innovation but will ultimately harm consumers. Any injunction that imposes, even temporarily, a sweeping duty to deal on this ever-changing competitive landscape warrants considerable scrutiny.