Context: Last year, a San Francisco jury found for Epic Games on all counts against Google in an antitrust litigation over the Google Play Store. A motion for judgment as a matter of law (JMOL) that Google brought before jury deliberations even began was limited by the judge to only two pages, yet provided an overview of arguments Google was going to raise in a more elaborate motion after the trial (December 25, 2023 games fray article).
What’s new: Last night (February 2, 2024), Google filed its 40-page post-trial JMOL motion (formally within the 30-page limit, but 40 if one includes table of contents etc.). Google argues that no reasonable jury could have found or Epic, or that the jury verdict was at least against the weight of the evidence. Google also alleges improper jury instructions by the district court in various respects, and says that at minimum there should be a new trial, and then a bench trial (i.e., without a jury). Google now also places some emphasis on findings in Epic Games v. Apple, a case that ended last month as the Supreme Court denied both parties’ petitions (January 16, 2024 games fray article).
Direct impact: Judge James Donato is very unlikely to agree with Google’s legal arguments at this stage, and the jury’s findings are entitled to a level of deference that also makes it unlikely the judge would overrule the jury on factual grounds. Google preserves as many arguments as possible for the foreseeable appeal. In the short term, Google may more realistically hope to instill some doubt in Judge Donato that the trial court’s decision will stand. Such doubt could lead the district court to refrain from ordering as impactful an injunction as it otherwise would.
Wider ramifications: Google’s references to the Epic v. Apple outcome reflect the complexity of the multijurisdictional app store battlefield, a complex web of lawsuits, regulatory proceedings and legislative initiatives. Google argues that if Apple is allowed to carry on like before, Google should not have to depart from it (“That the Google Play store’s primary competitor is free to use the same basic service fee model explains why it is important for Google to use that same model.”). That is understandable (and undeserved injustice indeed), but unlikely to persuade a court. In the greater scheme of things, it is regrettable that Google is primarily betting on an appeal. Google would actually have more power than anyone (including the EU with its Digital Markets Act) to change the mobile app distribution model: if Google decided to become developers’ friend while Apple leaves out no opportunity to treat developers as enemies and with disdain, developers could help Android regain market share from iOS and could promote a platform to users based on lower in-app purchasing prices while Google would still make money on each device.
Not only does Google have the fundamental choice between continuing the legal fight and simply throwing Apple under the bus, but even if one accepts it as a given that Google wants to prevail on appeal, there are the options of betting on a handful of very strong arguments (precision-bombing) or trying a laundry list of things (carpet-bombing). Google has opted for the latter, but at the appellate stage will be forced to do the former. First, here’s the JMOL motion:
Epic will get to file an equally long document in three weeks (February 22, 2024) to oppose Google’s motion. A week later (February 29, 2024) Google will file a 15-page reply brief reinforcing its JMOL motion. Judge Donato will then adjudicate JMOL on the papers (with the predictable outcome being a denial) and subsequently schedule an evidentiary hearing to discuss remedies. Two weeks prior to that hearing, Epic will file a proposed injunction and expert statements in support thereof. Google will oppose with the help of its own experts.
While it is now Epic’s job to respond, games fray would like to share the following initial explanations of, and observations on, certain arguments and theories presented by Google:
Allegedly single-brand market definition
Google argues that Epic actually proposed, and the jury adopted, a single-brand market definition without meeting the foremarket-aftermarket requirements under the Supreme Court’s Kodak decision. At first sight, one might say it’s a single-brand market just for the distribution of, and payments in, Android apps (i.e., excluding iOS apps, console games etc.). But Judge Donato and Epic viewed it differently.
Here, it’s important to compare how Android app distribution works compared to the distribution of iOS apps. On iOS, there’s only one App Store: Apple’s. That market definition would undoubtedly be a single-brand market. On Android, there are other app stores, such as the Samsung Galaxy Store, but Epic’s case was and remains about how Google prevents them from competing effectively.
If the appeals court agreed with Google that a market for Android app distribution and a market for Android in-app payment services are Kodak markets, then there is some risk here for Epic. Among other things, Google argues that this kind of question was resolved definitively in Epic v. Apple.
Another question about market definition is geography, but that one comes up with respect to whether the jury had enough evidence to find what it did.
The market definitions were made by the jury, and Epic will point to evidence that makes those jury findings anything but unreasonable. But it does appear likely that Google will raise at least the single-brand market question (and maybe even the geographic question) on appeal.
Rule-of-reason jury instructions
Google argues that the jury should have been told to consider procompetitive benefits beyond the relevant markets, and that it should have been told to take a position with respect to each of various categories of challenged conduct on whether there were anticompetitive effects. Google even attacks the court’s instruction concerning a balancing of positive and negative competitive effects, and in that context Google even disagrees with the Ninth Circuit’s Epic v. Apple opinion, arguing the appeals court was wrong in light of Supreme Court precedent.
None of those arguments appears particularly strong.
Jury verdict allegedly unsupported by sufficient evidence
There are four different challenges to the verdict in this section:
Google argues that the market definition should have been U.S.-only. Consumers won’t download Android apps from, say, the One Store in China if they are based in the U.S. (even if technically not 100% unimaginable, it’s just not going to happen to a significant extent).
Google says Epic failed to prove anticompetitive effects.
Google says Epic had no tying claim, starting with Android app distribution and in-app payment services not even constituting separate products.
Google disputes that Epic met its burden to identify less restrictive alternatives (for Google to obtain compensation for its services and intellectual property) that would still not result in significantly higher costs.
Presumably, Epic’s opposition brief will point to sufficient evidence that the jury verdict appears defensible.
Court rulings that barred Google from presenting certain types of evidence
Google challenges three types of restrictions Judge Donato imposed on its presentation of evidence. Two of them relate to inferences the jury was allowed to make based on Google’s conduct (overuse of attorney-client privilege and systematic destruction of sensitive chats). A third one is about references to Epic v. Apple and was already addressed in the fray4 summary’s section on wider ramifications.
It is difficult to take a position at this stage on the part concerning privilege. The one about Google Chats is weak: Google’s conduct was outrageous, and Judge Donato is in fact going to look into that separately from this particular litigation because he viewed Google’s actions as an assault on the system. As for Epic v. Apple references, U.S. courts are generally reluctant to allow argument based on other cases. Google has a stronger basis for arguing that Epic v. Apple matters than most other parties had in cases where such references were disallowed. But probably not strong enough.
Jury involvement and relevance of existing verdict
Not long before the trial, there was a dispute between Epic and Google with either side having the opposite objective as before with respect to whether the case should (apart from injunctive relief) be put before a jury. Initially Epic wanted a bench trial (judge without jury) and Google a jury trial. But things changed over time, especially with the adverse-inference instruction concerning Google’s automatic deletion of sensitive chats.
Google is relitigating that question now. With a view to the verdict that exists, Google says it should (if not tossed on other grounds) merely be treated as an advisory verdict, meaning that Judge Donato would have to make the decision and should just take the jury verdict into account as an opinion rather than as a definitive answer to any question. But that’s a fallback to a fallback: primarily Google wants the court (or later the appeals court) to hold that Google should have won, period, and the first fallback is a new trial, which Google then wants to be held without a jury.
Google’s problem is that in case of doubt, U.S. courts will involve a jury.
Overall impression
The risk to Epic that its jury win might be overturned (or that the case would be put before a second jury) is not completely negligible, but not particularly high either. This is not a case where a very obvious mistake was made by a judge or where a jury took a position that can’t be squared with the evidence.
Judge Donato will presumably deny Google’s motion and then proceed to the remedies determination. Epic will get an injunction, and Google will seek to have its enforcement stayed pending an appeal. This litigation can still take years unless Google makes the strategic decision to work things out with Epic and position itself as developers’ ally, for which there is no indication at the moment (other than what appears to be merely lip service by a new Google Play chief (Android Police article).