
Google LLC's best arguments for why an appellate court should reverse its loss to Epic Games Inc. over Google Play Store's marketing practices got strong pushback Monday from a three-judge panel of the 9th U.S. Circuit Court of Appeals.
The judges' evident skepticism of Google's position could signal a setback in its fierce competition with Apple Inc. in the lucrative app distribution market.
The appeal centers on claims that Google monopolizes the way consumers access and pay for apps on Android devices. A jury concluded in 2023 that Google illegally stifled competition, and a trial judge last year ordered it to revamp Play Store. Google's appeal challenges both outcomes. In re: Google Play Store Antitrust Litigation, 24-6256 (9th Cir., filed Oct. 15, 2024).
Epic Games' parallel suit against Apple Inc., filed on the same day it sued Google, ended with a bench decision that largely favored Apple but also faulted Epic's efforts to bypass Apple's App Store. The 9th Circuit affirmed. Separately, in 2023 Google agreed to pay $700 million to consumers and make several changes in a suit by 50 state attorneys general over its Play Store practices.
Monday's oral argument session in San Francisco lasted more than two hours, far longer than scheduled as the judges -- a bipartisan trio appointed by presidents from both parties -- peppered Google's lawyer with questions about her claims that her client was treated differently from Apple Inc. in the parallel case.
Hogan Lovells US LLP appellate practitioner Jessica L. Ellsworth, representing Google, cited similarities in the cases to urge that the panel should fall in line with the circuit panel that affirmed most of the trial court's rulings for Apple.
"Google and Apple vigorously compete, and that competition has shaped how we walk through the world," said Ellsworth, as she contended that their robust battle in the marketplace belies monopolization claims.
Ellsworth asserted that Apple's wins in its defense of Epic Games' lawsuit bars an opposite result in Google's case.
But Senior Circuit Judge M. Margaret McKeown, a President Bill Clinton appointee, retorted, "Just because they are players in the same market doesn't mean the Apple case is preclusive here."
Judge Danielle J. Forrest, a President Donald Trump appointee, pointed out that it is fundamental to antitrust law to take each case on its facts. "Android world works differently from Apple world," she said. "Your argument brushes those differences aside."
The judges noted that even though both companies market apps, Apple makes physical products while Google writes code. "I'm having difficulty with your argument," said Judge Gabriel P. Sanchez, whom President Joe Biden placed on the bench.
Google's complaint that a district judge wrongly refused to instruct jurors on a basic antitrust rule regarding aftermarkets also appeared to get little traction.
Ellsworth faulted U.S. District Judge James J. Donato of San Francisco, who oversaw the Google trial, for failing to instruct the jury on the legal requirements for proving an element of antitrust law regarding how defendants handle aftermarket sales. Yet the jury in the Apple case got such an instruction, she said.
"The very same products should be subject to the same governing legal framework," she said.
"You're talking about complaint language," McKeown said. "Now we're in trial language. Was there evidence about pricing and that sort of thing?"
Gary A. Bornstein, the co-head of litigation at Cravath, Swaine & Moore LLP, argued for Epic Games. He faced fewer questions after he made an obvious point about the difference between Apple's tangible products and Google's business model. "Google doesn't sell devices. Google's transactions are with original equipment manufacturers like Samsung."
There is no inconsistency between the outcomes of the Apple and Google cases because "you can have overlapping markets," Bornstein said. "Apple operates from soup to nuts. Google is entirely different; it doesn't operate an entire ecosystem. The consumer doesn't purchase an Android. The consumer buys a product, a durable good, with a different structure from the Android market."
David B. Lawrence, the U.S. Department of Justice's policy director at the antitrust division, argued briefly for affirmance of Epic Games' win at trial. "When the law has been violated, the remedy must restore competition to monopolized markets," he said.
The panel is expected to rule later this year. A further appeal to the U.S. Supreme Court is considered likely.
John Roemer
johnroemer4@gmail.com
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