How long will it take to resolve the Epic-Apple case? Expect a legal marathon

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A final verdict on Epic Games Inc.’s antitrust lawsuit against Apple Inc. could be as long as the 185-page ruling rendered by a federal judge last week. Try three to five years in a legal war of attrition that could make its way to the United States Supreme Court, some experts say.

Apple Inc. received a heavy blow last Friday when a federal judge in the Epic Games Inc. case issued an injunction stating that the company could no longer force developers to use its payment system, thereby bypassing commission fees. from 15 to 30%. However, the iPhone maker was not seen as an antitrust monopoly.

The appeal process began in earnest Sunday, when Epic deposit a petition to the Ninth Circuit Court of Appeals in San Francisco. Apple AAPL,
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who claimed a resounding victory, said he was considering all legal options and had until the end of January 2022 to appeal.

“Both sides have good questions on appeal. Epic challenging the definition of the market and the pro-competitive justifications found by the court, and Apple challenging the injunction of state law and possibly the definition of the market, ”antitrust lawyer Paul Swanson told MarketWatch. He expects Epic’s appeal “to run for at least another 18 months in the Ninth Circuit, and then we’ll see if there’s a tight legal issue for the Supreme Court,” he said. added.

Projected years of uncertainty could wreak havoc on the business plans of small and medium-sized developers, who are responsible for complying with App Store rules, and lawmakers whose bills are affected by future decisions. in the Epic-Apple case.

“From a business planning standpoint, it just adds more hoops to go through,” Morgan Reed, president of the App Association, which represents 5,000 small and medium-sized app developers, told MarketWatch. He fears the closely watched legal battle over the future of apps will drag on for months, if not years.

At the same time, Senate and House bills that would limit the powers of digital platforms like the App Store are advancing through the legislative process. Co-sponsors cite the need for new antitrust laws to curb the expanding tentacles of Apple, Google, Facebook Inc. FB,
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and Amazon.com Inc. AMZN,
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and others.

Adam Kovacevich, CEO of the Chamber of Progress, a tech industry policy group, isn’t so sure these bills need to be changed since Judge Gonzalez Rogers addressed the issue of payment systems outside of the ‘App Store. “His decision reduces the commission by 30%,” Kovacevich said.

If that doesn’t get developers, lawmakers, and regulators thinking, it could: Epic’s similar lawsuit against Google Alphabet Inc.’s parent GOOGL,
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GOOG,
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could begin in North Carolina federal court in 2022, meaning Epic will lead a two-pronged legal attack on two of tech’s biggest players. However, Epic should drop its action against Google if it loses the appeal against Apple, according to Kovacevich.

An extended debate between Apple and Epic is expected as tech giants with deep pockets have the resources, patience, ego and financial incentives to protect their digital territory. It’s the way Silicon Valley fights in the courts until you finally win.

For Apple, protracted court battles are nothing new. In fact, he fought an eight-year battle with four consumers over some of the same principles as the Epic case, according to Valarie Williams, an antitrust expert in Silicon Valley.

The Supreme Court of the United States ruled 5-4 against Apple in May 2019 in a case where plaintiffs argued that Apple’s 30% commission inflated the prices of iPhone software, constituting an unfair use of monopoly power. While the procedural decision was a loss for Apple, it will be years before the case is finally resolved.

Apple maintains that consumers cannot sue because Apple was simply providing a market for the apps, and only app developers have standing to bring antitrust action – which Epic did unsuccessfully, according to Gonzalez’s ruling. Rogers.

Another long-term brawl has found – you guessed it – Apple ultimately won a patent infringement dispute with smartphone rival Samsung Electronics Co. Ltd. KR: 005930 which also reached the Supreme Court.

In the spring of 2011, Apple sued Samsung for alleged infringement of design patents, sparking a series of skirmishes that culminated in an 8-0 Supreme Court decision in late 2016 to send the case back to the Federal Circuit Court to define the appropriate legal standard “article of manufacture”. By mid-2018, lawsuits over the patent litigation had been resolved, with Apple receiving $ 539 million.

There is a rich history of such marathon clashes. The grandfather of the litigation was ORCL of Oracle Corp.,
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a decade-long copyright dispute with Google that was decided by the Supreme Court in April 2021.

The court voted 6-2 in favor of Google in an $ 8 billion dispute over the internet company’s creation of the Android operating system used on most smartphones around the world. Google wrote millions of lines of new computer code to create Android, released in 2007, but it also used 11,330 lines of code that are part of Oracle’s Java platform – an action Oracle called ‘”flagrant act of plagiarism”.


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