On Tuesday, Apple went back to court to make its case against Judge Yvonne Gonzalez Rogers’ injunctions in the Epic Games case, and found a receptive bench. Here’s how the hearing went.
‘How do you measure that?’
In its argument to the United States Court of Appeals for the Ninth Circuit, Apple is trying to either reverse Judge Rogers’ second injunction, issued earlier this year, or reverse her original injunction, issued in 2021. Apple also requested the case to be reassigned to a different judge.
In yesterday’s deposition, Apple’s lawyer Gregory Garre took a narrower approach and focused his arguments on the zero commission rule, which prevents the company from collecting any fees for downloads or purchases that take place outside of its own environment.
Upon hearing Apple’s arguments, the court seemed interested in understanding how Apple would calculate exactly how much it should be compensated for payments processed outside the App Store, while also questioning Apple’s commitment to actually solving the issue:
Judge Milan Smith Jr: I don’t think Judge Gonzalez Rogers looked at (Apple’s 30% commission) that way. I think she did think you were trying to hide something that you reverse engineered what was done to try to get a specific result. We want to get it right. Let’s just argue that you’re entitled to a “reasonable” commission presumably for at least your at least your actual costs. But how do you measure that? Because the iOS platform is quite complicated. It’s been developed over a period of time, continues to be developed. I know that from my own gadgets. How do you measure that?
Gregory Garre: This is why we would have experts, but I think if you would look at the value the developers receive because of the tools and technologies that Apple grants them access to, tools that are used in improving and developing apps in the first place, the value of a safe and secure marketplace in which to operate apps, which is something all users of the Apple ecosystem greatly desire, and the the value of the access to Apple’s vast user base. All of those items, things, technologies have value that economists can place on them, that experts would place on them. And we would come forward with a commission that we thought was fair and appropriate in that light.
Judge Milan Smith Jr: And given the fact that Apple wants to get compensated as soon as they can, are you saying that Apple would have a strong incentive to come forward with a “reasonable fee” rather than just playing games?
Gregory Garre: Absolutely, your honor. The last thing that Apple wants is to be tied up in further proceedings like this and to have to come before this court again. As I mentioned at the outset, we take very seriously what the district court has already said. We will take very seriously what this court says in its opinion, and we have every incentive to go back, propose a reasonable commission and defend it in a proceeding, a modification proceeding in which experts can be heard on both sides.
The court, however, was skeptical of Apple’s argument that the decision should apply only to Epic Games rather than to all App Store developers in the United States. In response, Mr. Garre maintained that the ruling should be limited to Epic, and that other developers would need to bring their own lawsuits if they wanted similar changes to affect them.
’Quite a penalty’
Meanwhile, Epic’s lawyer Gary Bornstein, tried to persuade the court that during this entire battle, “Apple never once made the argument that a lower (commission), would be appropriate,” so to let Apple send the case back to the district court and “try again and do something that (they) never asked the court to do in the first place” wouldn’t be fair to the premise or the course of the case.
The court, however, seemed to lean towards Apple’s request. In addition to mentioning the fact that Epic Games “surreptitiously changed” the code in the move that got the company kicked out of the App Store, it also argued that not allowing Apple to charge anything for the purchases in question “is quite a penalty,” as “we’re talking (about) billions of dollars, right?”
Epic’s lawyer did his best to refute the premises of the court’s more favorable observations to Apple, but in general, the arguments didn’t seem to land. One judge specifically mentioned the fact that “nothing in the injunction says (Apple) cannot charge a commission”.
Following quick remarks from both legal teams, the court adjourned, and it is now up to them to decide whether to grant or deny Apple’s requests to reverse either injunction, or possibly assign a new judge if the case returns to the district court.
You can watch the entire deposition below:
What’s your take on the outcome of the deposition? Let us know in the comments.
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