Apple asks court to rule iOS is not an ‘essential facility’ - The Verge

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After two and a half weeks in court, Apple is taking aim at one of the central elements of Epic’s antitrust case. In a filing Tuesday night, Apple asked the court to dismiss one of the 10 counts alleged in the initial complaint, arguing Epic had failed to establish any evidence for the charge that Apple had violated the essential facilities doctrine by failing to provide access to software distribution tools on iOS.

“At trial, Epic adduced no proof in support of this claim,” Apple’s filing reads. “On the contrary, Epic’s principal expert expressly disclaimed any opinion on essential facility, and (in response to a direct question from the Court) rejected the notion that iOS should be treated as a public utility. The Court should enter judgment for Apple on this claim.”

“It sounds to me like what Epic is saying is ‘We want Apple to allow us to deal on their platform,’” says the judge

Filed as a motion for partial findings, Apple is pushing to split off the essential facilities charge from the other nine charges made in Epic’s initial complaint. In essence, Apple believes it can win a quick victory on this specific point. That won’t settle the case entirely since the other nine charges still require a ruling, but it would be an unexpected and embarrassing loss for Epic.

Epic hasn’t talked about the essential facilities doctrine much in court, and Apple’s lawyers are responding in part to vocal skepticism from the court. On May 12th, Judge Yvonne Gonzalez Rogers specifically confronted Epic about the weakness of its evidence for the charge. “I’ve heard quite a bit of evidence throughout the trial regarding how big Apple is and how anticompetitive it is,” Gonzalez Rogers said. “It sounds to me like what Epic is saying is ‘We want Apple to allow us to deal on their platform. And there are only two of these platforms, and because there are only two platforms, all these competitors can’t succeed without access to these platforms.’”

Epic’s counsel clarified that it had “not abandoned that theory” — but it hasn’t substantially raised it in the days since.

“Apple controls iOS, which is essential to effective competition in the iOS App Distribution Market,” argues Epic

The essential facilities doctrine is a long-standing element of antitrust law that prevents dominant firms from using bottleneck services to box out competitors. In a foundational example from 1912, a railroad consortium prevented competitors from offering passage to and from St. Louis by denying access to switching yards around the city. The Supreme Court ruled that the arrangement was an illegal restraint of trade, establishing that companies must provide reasonable use of facilities that are essential for competitors.

In its complaint, Epic argues that app distribution on iOS is the same kind of bottleneck, charging that Apple has used its control over the iOS platform to prevent Epic and other competitors from offering competing app stores.

“Apple controls iOS, which is essential to effective competition in the iOS App Distribution Market,” the complaint argues. “Through its denial of its essential facility, Apple maintains its monopoly power in the iOS App Distribution Market.”

But Apple is now countering that Epic has reasonable access to iOS through the App Store itself — and that iOS customers are plainly not essential to the operation of its business since the company has been broadly successful without them.

“Epic’s own experience, as established by the trial evidence, confirms that there is nothing ‘essential’ about iOS,” Apple’s filing reads. “Fortnite was a success before it was made available on the App Store, and Fortnite’s revenues from iOS (prior to its removal) accounted for just 7 percent of its total revenue. And native apps are not the only way Epic can reach iOS customers—it also is free to distribute its products (including by selling V-Bucks) to iOS customers over the internet.”

Apple’s motion asks for a hearing on the issue on Monday, May 24th — or “as soon thereafter as the matter may be heard by the Court.”

The Link Lonk


May 19, 2021 at 09:18PM
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Apple asks court to rule iOS is not an ‘essential facility’ - The Verge

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