Epic Games, Inc. v. Apple, Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
EPIC GAMES, INC.,
Plaintiff-counter-
defendant-Appellant,
v.
APPLE, INC.,
Defendant-counter-claimant-
Appellee.
No. 21-16506
D.C. No.
4:20-cv-05640-
YGR
ORDER
EPIC GAMES, INC.,
Plaintiff-counter-
defendant-Appellee,
v.
APPLE, INC.,
Defendant-counter-claimant-
Appellant.
No. 21-16695
D.C. No.
4:20-cv-05640-
YGR
Filed July 17, 2023

-- 1 of 11 --

2 EPIC GAMES, INC. V. APPLE, INC.
Before: SIDNEY R. THOMAS and MILAN D. SMITH,
JR., Circuit Judges, and MICHAEL J. MCSHANE,*
District Judge.
Order;
Concurrence by Judge M. Smith
ORDER
Apple’s Motion to Stay the Mandate (Dkt No. 247) is
GRANTED. Pursuant to Rule 41(d) of the Federal Rules of
Appellate Procedure, the mandate is stayed for 90 days to
permit the filing of a petition for writ of certiorari in the
Supreme Court. Apple must notify the Court in writing that
the petition has been filed, in which case the stay will
continue until the Supreme Court resolves the petition. See
Fed. R. App. P. 41(d)(2)(B)(ii). Should the Supreme Court
grant certiorari, the mandate will be stayed pending
disposition of the case. Should the Supreme Court deny
certiorari, the mandate will issue immediately. The parties
shall advise this Court immediately upon the Supreme
Court’s decision.
* The Honorable Michael J. McShane, United States District Judge for
the District of Oregon, sitting by designation.

-- 2 of 11 --

EPIC GAMES, INC. V. APPLE, INC. 3
M. SMITH, Circuit Judge, concurring in the granting of the
motion for a stay of the mandate pending the filing of a
petition for certiorari:
Given our general practice of granting a motion for a stay
if the arguments presented therein are not frivolous, I have
voted to grant Apple’s motion. See United States v. Pete,
525 F.3d 844, 850 (9th Cir. 2008) (it is “often the case” that
our court stays the mandate while a party seeks certiorari). I
write separately to express my view that, while the
arguments in Apple’s motion may not be technically
frivolous, they ignore key aspects of the panel’s reasoning
and key factual findings by the district court. When our
reasoning and the district court’s findings are considered,
Apple’s arguments cannot withstand even the slightest
scrutiny. Apple’s standing and scope-of-the-injunction
arguments simply masquerade its disagreement with the
district court’s findings and objection to state-law liability as
contentions of legal error.
I. STANDING
Because Apple’s anti-steering provision negatively
affects the revenue Epic earns through the Epic Games Store,
Epic had standing to seek injunctive relief against that
provision pursuant to California’s Unfair Competition Law
(UCL), Cal. Bus. & Prof. Code § 17200 et seq.
To establish standing, a plaintiff must have “suffered an
injury in fact that is concrete, particularized, and actual or
imminent.” TransUnion LLC v. Ramirez, 141 S. Ct. 2190,
2203 (2021). “[M]onetary harms” are one of the “[m]ost
obvious” types of harm that satisfy the injury-in-fact
requirement. Id. at 2204.

-- 3 of 11 --

4 EPIC GAMES, INC. V. APPLE, INC.
Epic has “three primary lines of business, each of which
figures into various aspects of [this case].” Epic Games, Inc.
v. Apple, Inc. (Epic II), 67 F.4th 946, 967 (9th Cir. 2023).
First, Epic is a “video game developer—best known for the
immensely popular Fortnite.” Id. Second, Epic is the “the
parent company of a gaming-software developer” (Epic
International), which still has several apps on Apple’s App
Store. Id. Third, Epic is “a video game publisher and
distributor,” offering “the Epic Games Store as a game-
transaction platform” on multiple devices. Id. at 968. In this
last role, Epic is “a direct competitor” of Apple’s App Store
“when it comes to games that feature cross-platform
functionality like Fortnite.” Id.
As the panel opinion explained, the second and third
lines of business—not the first—give rise to an injury in fact.
See id. at 1000. As the parent company of Epic International,
Epic is harmed because its subsidiary still has apps on the
App Store that are subject to the anti-steering provision. As
a games distributor, Epic is harmed because app developers
cannot direct, with the promise of lower prices, their users to
the Epic Games Store, which takes a significantly lower
commission on app purchases than the App Store. As we
explained: “[Epic] offers a 12% commission compared to
Apple’s 30% commission. If consumers can learn about
lower app prices, which are made possible by developers’
lower costs, and have the ability to substitute to the platform
with those lower prices, they will [almost always] do so—
increasing the revenue that the Epic Games Store generates.”
Id.
Such monetary loss is hornbook injury-in-fact, and
Apple’s arguments to the contrary misconstrue both our
decision and the record. Apple asserts that Epic lacks
standing because “Epic’s developer program account has

-- 4 of 11 --

EPIC GAMES, INC. V. APPLE, INC. 5
been terminated,” meaning Epic “has no apps on the App
Store.” But we did not conclude, as Apple’s argument
suggests, that Epic was injured in its role as a video game
developer (i.e., as the creator of the since-removed Fortnite).
We recognized at the very start of our standing analysis that
Apple had “terminated Epic’s iOS developer account,” and
instead determined that Epic suffered an injury-in-fact in its
role as a parent company and competing games distributor.
Id. at 1000.
Regarding these two bases on which we actually
determined standing, Apple offers only the conclusory
statement that “no trial evidence or findings by the district
court” support them. However, that assertion is simply false.
Regarding Epic’s role as the parent of Epic International, the
record contains screenshots showing that Epic International
still has six apps on the App Store, even though the parent
company’s developer account has been terminated.
The record is also filled with support for the common-
sense proposition that Epic is harmed as a competing games
distributor because consumers would shift some of their
spending from the App Store to the Epic Games Store if
developers could communicate the availability of lower
prices on the latter. To begin, Apple’s own internal
documents conclude that two of the “most effective
marketing activities” are “push notifications” and “email
outreach,” which are the two practices prohibited by Apple’s
anti-steering provision. Epic Games, Inc. v. Apple Inc. (Epic
I), 559 F. Supp. 3d 898, 1054 (N.D. Cal. 2021); see also Epic
II, 67 F.4th at 1001. Moreover, before the district court,
Apple defeated Epic’s proposed market definition for its
Sherman Act claims based on the very kind of factual
findings that it now claims are non-existent. The district
court found that video games increasingly can be “ported

-- 5 of 11 --

6 EPIC GAMES, INC. V. APPLE, INC.
across multiple devices” because of the growing prevalence
of cross-platform functionality. Epic I, 559 F. Supp. 3d at
985; see also Epic II, 67 F.4th at 967 (describing “cross-
play,” “cross-progression,” and “cross-wallet”). “[N]ot all
games” feature cross-platform functionality, and some
platforms have taken steps to limit it. Epic I, 559 F. Supp.
3d. at 985. But when it comes to the games that do offer
such cross-platform functionality, app-transaction platforms
(like the App Store and Epic Games Store) “are truly
competing against one another.” Id. The district court,
therefore, rejected the contention that the App Store is a
market unto itself and summarized its analysis as follows:
“[N]either consumers nor developers are ‘locked-in’ to the
App Store for digital mobile game transactions—they can
and do pursue game transactions on a variety of other mobile
platforms and increasingly other game platforms.” Id. at
1026. Indeed, the district court found that Fortnite data
provided a particularly vivid illustration: Between 32 and
52% of Fortnite users play the game on multiple devices,
and, after Fortnite was removed from the App Store, 87% of
Fortnite spending that had occurred on iOS devices was
shifted to other platforms. Id. at 961 & n.277.1
Apple wants to have it both ways: On the merits, it
argued that there was sufficient evidence to support a finding
that consumers can, and do, substitute across various app-
transaction platforms. But on standing, it now argues that
1 On appeal, the panel majority did not address the district court’s
substitution factual finding, as we determined that Epic failed to make a
required threshold showing for its proposed single-brand market: that the
restrictions it alleged to cause consumer lock-in were “not generally
known” to consumers when they purchased iOS devices in the
foremarket. Epic II, 67 F.4th at 976–77, 980–81.

-- 6 of 11 --

EPIC GAMES, INC. V. APPLE, INC. 7
there would be absolutely no substitution if app developers
could inform users of lower prices available on the Epic
Games Store.
II. SCOPE OF THE INJUNCTION
The district court did not abuse its discretion in enjoining
Apple’s anti-steering provision as to all iOS developers
because doing so was necessary to fully remedy the harm
that Epic suffers in its role as a competing games
distributor.2
“[I]njunctive relief should be no more burdensome to the
defendant than necessary to provide complete relief to the
plaintiff[].” Califano v. Yamasaki, 442 U.S. 682, 702
(1979); see also Epic, 67 F.4th at 1002 (setting forth the
same rule). An injunction remedying a plaintiff’s harm may
“affect[] nonparties[] [if] it does so only incidentally.”
United States v. Texas, 2023 WL 4139000, at *12 (U.S. June
23, 2023) (Gorsuch, J., concurring); see also Bresgal v.
Brock, 843 F.2d 1163, 1170–71 (9th Cir. 1988) (“[A]n
injunction is not necessarily made overbroad by extending
benefit or protection to persons other than the prevailing
parties in the lawsuit—even if it is not a class action—if such
breadth is necessary to give prevailing parties the relief to
which they are entitled.”).
2 Apple argues in its motion for a stay that the injunction will subject iOS
users to “scams, fraud, and objectionable content.” But the district court
expressly found that the anti-steering provision could be enjoined
“without any impact on the integrity of the [iOS] ecosystem.” Epic I,
559 F. Supp. 3d at 1055. Both the district court and our court upheld
Apple’s ability to control what content can be downloaded on iOS
devices. The injunction against the anti-steering provision simply allows
developers to let users know that certain content (which Apple has itself
chosen to allow access to) can be purchased at a lower price elsewhere.

-- 7 of 11 --

8 EPIC GAMES, INC. V. APPLE, INC.
Apple contends that the district court’s injunction
impermissibly allowed Epic’s suit to proceed as a “de facto”
class action in which Epic obtained nationwide injunctive
“relief on behalf of others.” To paint this picture, it argues
that “the panel never explained” how harm to Epic’s
“subsidiaries justified an injunction applicable not only to . .
. its subsidiaries, but also to all other U.S. developers.” Like
its standing argument, this argument overlooks aspects of the
panel opinion’s analysis that are inconvenient to its position
and is incorrect. As the opinion explained, it was Epic’s role
as a competing games distributor—not its role as a parent
company—that justified application of the injunction
beyond just Epic’s subsidiaries. As a games distributor, Epic
is harmed by Apple’s anti-steering provision’s prevention of
“other apps’ users from becoming would-be Epic Games
Store consumers.” Epic II, 67 F.4th at 1003. Had the district
court limited the injunction only to Epic’s subsidiaries’ apps
on the App Store, the injunction would have “fail[ed] to
address the full harm caused by the anti-steering provision.”
Id. The injunction is thus consistent with the minimally-
burdensome principle because the injunction’s “scope is tied
to Epic’s injuries.” Id.
Apple’s argument also overlooks that, in an antitrust suit
brought by a competitor, injunctive relief will almost by
definition have incidental benefits to non-parties—since
antitrust law protects competition, not individual market
participants. To be sure, it is the “the exception,” not the
rule, for injunctive relief to incidentally affect non-parties—
and such cases will likely be few and far between in most
areas of law. Cachil Dehe Band of Wintun Indians of Colusa
Indian Cmty. v. California, 618 F.3d 1066, 1084 (9th Cir.
2010). But injunctions with incidental benefits for non-
parties are the inevitable result when a competitor-plaintiff

-- 8 of 11 --

EPIC GAMES, INC. V. APPLE, INC. 9
makes the difficult showing that it is entitled to injunctive
relief pursuant to state or federal competition law. As a
threshold matter, a competitor-plaintiff must prove that the
defendant’s conduct caused it a tangible injury as a
competitor. But to ultimately prevail and obtain relief, it
must prove that the defendant’s conduct harmed competition
(i.e., consumers). This two-types-of-harm requirement
necessarily means that relief will have two types of
benefits—remedying the competitor’s harm in the main,
while benefitting consumers incidentally.
Begin with the statute at issue here: California’s UCL.
To establish statutory standing, a competitor-plaintiff must
have “suffered injury in fact and . . . lost money or property,”
such that its bottom line as a competitor was negatively
affected. Cal. Bus. & Prof. Code § 17204. But to win on the
merits, a competitor-plaintiff must show that the defendant’s
conduct “threatens an incipient violation of an antitrust law,
. . . violates [antitrust law’s] policy or spirit . . . , or otherwise
significantly threatens or harms competition.” Cel-Tech
Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163,
186–87 (1999). Because antitrust’s goal is the “the
protection of competition, not competitors,” Cargill, Inc. v.
Monfort of Colo., Inc., 479 U.S. 104, 110 (1986), a
competitor-plaintiff will win on the merits only if it proves
that the defendant’s conduct harms consumers. Therefore,
by the time a court is fashioning injunctive relief in a UCL
competitor suit, the court has already determined both that
(1) the defendant’s conduct caused the plaintiff-competitor
to lose “money or property,” and (2) that the same conduct
harmed consumers. Relief remedying (1) will necessarily
have incidental benefits for the consumers found to have
been harmed at (2). If that were not the case, then the
plaintiff-competitor would not have prevailed on the merits.

-- 9 of 11 --

10 EPIC GAMES, INC. V. APPLE, INC.
Federal law imposes a similar two-types-of-harm
requirement. To establish Article III standing, a plaintiff-
competitor must have “suffered an injury in fact,” such as
“monetary harm[].” TransUnion, 141 S. Ct. at 2203. But
the plaintiff-competitor must also establish antitrust injury—
that their “injury [is] of the type the antitrust laws were
designed to prevent.” Cargill, 479 U.S. at 111, 117 (lost
profits caused by competitor’s lower prices after merger are
not antitrust injury). Similarly, on the merits, the
competitor-plaintiff must prove the defendant’s conduct
harms consumers by, for example, decreasing output or
raising prices. See Epic II, 67 F.4th at 983. If a competitor-
plaintiff is able to serve two masters and establish Article III
standing on the one hand and antitrust injury and liability on
the other, then the competitor-plaintiff would have
necessarily shown that the defendant’s conduct harms both
the plaintiff as a competitor and consumers. So again, it is
hardly surprising that the injunctive relief granted in such a
case will carry incidental benefits for consumers.
Consider, as an example, the Kodak-parts litigation that
was the subject of the Supreme Court’s decision in Eastman
Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451
(1992). Independent service organizations (ISOs) alleged
that Kodak violated federal antitrust law by “adopt[ing]
policies to limit the availability of parts to [the] ISOs to make
it more difficult for ISOs to compete with Kodak in servicing
Kodak equipment.” Id. at 455. The Supreme Court
affirmed our court’s denial of summary judgment, id. at 486;
on remand, the ISOs prevailed in a jury trial and the district
court entered an injunction requiring Kodak to sell its parts
to ISOs on “reasonable and nondiscriminatory terms and
prices.” Image Tech. Servs., Inc. v. Eastman Kodak Co., 125
F.3d 1195, 1201 (9th Cir. 1997). The injunction remedied

-- 10 of 11 --

EPIC GAMES, INC. V. APPLE, INC. 11
the ISOs’ harm: their inability to compete for “large
contracts” because they lacked “sufficient parts.” Id. at
1222. But the injunction also incidentally benefited
consumers by breaking up what the jury had found to be an
unlawfully maintained monopoly. See id. at 1207–12. The
injunction was challenged on several grounds, see id. at
1224–25, but there was no hint of the radical argument that
Apple now advances: that a competition-law injunction is
invalid if it benefits consumers.
CONCLUSION
Apple’s standing and scope-of-the-injunction arguments
challenge an imagined panel opinion on an imagined record.
When the panel opinion’s reasoning and the district court’s
factual findings are fully considered, the motion’s arguments
fall far short of establishing legal error.

-- 11 of 11 --