9th Circuit Affirms in Part, Reverses in Part Epic's Antitrust Claims vs. Apple

The 9th U.S. Circuit Court of Appeals, in an opinion Monday (docket 21-16506), affirmed in part and reversed in part the district court’s judgment against Epic Games on its Sherman Act claims for restraint of trade, tying and monopoly maintenance against Apple. The panel ruled in Epic’s favor on its claim under California’s Unfair Competition Law, but against Epic on Apple’s claim for breach of contract; and against Apple on its claim for attorney fees.

When Apple opened the iPhone to third-party app developers, it created a “walled garden,” rather than an open ecosystem in which developers and users could transact freely without mediation from Apple, said the opinion. The 9th Circuit affirmed the district court’s denial of antitrust liability and its corresponding rejection of Epic’s illegality defense to Apple’s breach of contract counterclaim. But it held that the district court erred as a matter of law in defining the relevant antitrust market and in holding that a non-negotiated contract of adhesion, such as Apple’s Developer Program Licensing Agreement, falls outside the scope of Sherman Act Section 1.