Thread by @AkivaMCohen

Huge news in Epic v. Apple, where the judge just ruled for Epic that Apple *must* allow app developers to provide users with non-AppStore purchasing options if they want them, under California unfair competition law - but also that Apple was not a monopolist under anti-trust law

The court also found Epic breached its contract with Apple and is required to pay them millions of dollars. Time for a live-read

The court starts with a recap of the case, and a discussion of the parties' views of the "relevant market." In an antitrust case, the definition of the market can be the ballgame, because whether a defendant has monopoly power may depend on how tightly or widely you zoom in

So: Epic argued that the "relevant market" was "the App Store" - nobody competes with Apple in the "App Store" market, so if the court bought that argument, then Apple would obviously be a monopoly.

Note: This echoes the "Social Media is a Monopoly" argument from the right

Facebook and Twitter and YouTube and so on may be competitors, but Facebook has a monopoly on FB, Twitter on Twitter, etc.

The judge (correctly) rejected that argument.

Apple tried to drive the lens way too far in the other direction, widening it out to the videogame market as a whole, in which Apple is *obviously* not a monopolist (and hell, in which Epic is probably more powerful)

The court rejected both, and zeroed in on a different market: The market for mobile video game transactions. I'm not an anti-trust guy, so maybe my gut instincts are wrong, but I think the judge got this one right

This is going to hurt, btw. Again, I'm not an antitrust guy, so maybe I'm reading this wrong, but it sounds to me like the court is saying it's not convinced Apple *couldn't* be proven to be a monopolist in that narrower market, just that Epic didn't have the evidence for it. And

if that's so, it may well be that Epic's choice to argue for the narrowest possible market is the reason it didn't have that evidence. I'm not familiar with the trial record, so maybe I'm overreading this. But strategy often implicates what evidence you go out and get, and

trial counsel may have been concerned that putting in any evidence about a broader market than "the App Store" might have weakened their chances of getting a finding that the App Store was the relevant market.

That's one hell of a swing-for-the-fences approach, but that's a big part of litigation strategy: do you go for the high-variance play, the one that if it hits you win your case, guaranteed, but may not hit? Or do you make maybe a more solid argument on the relevant market - but

one that will make it much harder to prove monopolistic conduct within that market?

These types of decisions are why GCs and lead partners make the money they do; there are real arguments in either direction, and can be billions of dollars at stake hinging on their judgment

Again, I don't know the trial record, and maybe they did make the fallback argument about the mobile gaming market, and just didn't have the evidence. Let's see as we read through. But I figured it was worth making the broader point about litigation strategy anyway.

Then we get to the meat of the ruling: what the judge found. She isn't kidding about the length, btw - it's 185 pages. No, we won't cover every paragraph, and in fact, let's jump to that outline

Here it is. As you can see, this ruling is ... um ... an epic.

Note also that the judge's eventual ruling on the relevant market seems to come from Apple's evidence on what the market for videogames looks like

But wait, there's more.

Look, this opinion is a beast and I can't spend my whole day on this. I'll put in another hour highlighting stuff I think is relevant, and then have to go back to paying work and prepping for shabbos, and pick this up tomorrow night. OK?

Back to the text, and the court's overview. Back to the swing for the fences thing: 'Breach the contract and then sue' was one hell of a strategy, and I don't know why Epic did it when they could have just sued for a declaratory judgment. Seems needlessly risky

I suppose there's a thought process that says "well, at worst we'll be in the same position after a judgment as we'd be if we just paid under the contract while the case was pending". But that depends on the contract terms, interest rates, & a bunch of other stuff I can't assess

And personally, I just don't like the optics of coming into court and asking for relief while being in active breach of contract terms you agreed to. Atmospherically, I'd rather be saying "this is wrong but we're living under it until we get a ruling saying so"

Again, this is total Monday morning quarterbacking (and from a guy who roots for a team that hasn't had good QB play in forever, so grain of salt, I guess). But ... not the approach I'd have advised

OK, I'm not going to walk you through the court's entire summary of Epic's business and Fortnite, but y'all have to see this

Next the court summarizes Fortnite's freemium economic model

Also ... ugh. Why make this overstatement when it's so easily contradicted?

This probably wasn't going to help their case

Neither was this.

Oh dear.

Look, it's really really hard to get a court to order your adversary to do something you're not doing yourself. But beyond that, why put your credibility at risk to make a claim that's so easily contradicted? I mean, it would be one thing if you had documents backing

your claim that you intended your "Epic Games Store" to be about more than games. Like, lots and lots of documents saying so, and discussing ways to implement that plan. That would be great. But in the absence of that? Just don't make that argument

BTW: Even if it's true. You don't need to inject that into the case; unless I'm missing something (very possible), whether the EGS was intended to include stuff other than games isn't super relevant to the causes of action. So if all you have is undocumented internal thoughts...

why ask the court to make a credibility determination on it?

Again, I'm coming to this ruling cold, Epic had very able lawyers representing them, and they primarily got what they wanted (ability to sell to IOS users without using Apple Pay). So "maybe I'm missing something" isnt

just a rhetorical caveat. I kind of probably am. But ... I don't get this one.

Ah. Comprehension slowly dawns.

Or does it?

So, here's the thing. I get that you want to argue that the Epic Games Store is a competitor that Apple is bodying out of iOS ... but you can make that argument even if EGS is limited to games! You don't have to offer everything the App Store does to compete with it!

This, um, is not a paragraph you want to see in a decision about whether you had a right to breach these terms

So ... about that ... yeah ...

Oh. Ok.

Look, I think this guy, and Zuckerberg, and a whole bunch of these tech bros are vastly, vastly overestimating the market for "virtually sitting in a bar and talking". Like ... guys? I don't need an avatar drinking for me while I converse with someone online

And going by the court's reference to Sweeney's belief as "sincerely held" ...

And with that, we'll break at page 20 and I'll go do some client work and cooking.