Former Antitrust Enforcers Brief to the 9th Circuit in Epic Games v Apple
INTEREST OF AMICI CURIAE[1]
Amici curiae are former government officials with significant experience enforcing federal antitrust laws on behalf of the United States Department of Justice and/or the Federal Trade Commission. Amici are leading voices in the antitrust field; they have testified as experts before Congress, taught at top-tier educational institutions, published leading antitrust articles, and been cited in federal antitrust decisions.
In their capacity as former enforcement officials-and as antitrust practitioners, academics, and economists-amici have a substantial interest in the consistent enforcement, coherent interpretation, and predictable application of antitrust laws. Background details for each of the amici are set forth in an Addendum to this brief.
INTRODUCTION AND SUMMARY OF ARGUMENT[2]
The Supreme Court recently emphasized that “caution is key” “[w]hen it comes to fashioning an antirust remedy.” NCAA v. Alston, 594 U.S. 69, 106 (2021). Caution is necessary because even well-intentioned judicial remedies can have unintended anticompetitive consequences that undermine the purpose of our antitrust laws. As a result, “markets are often more effective than the heavy hand of judicial power when it comes to enhancing consumer welfare.” Id.
Here, the district court has failed to heed that caution. In the context of a contempt motion, without the requisite economic analysis, the district court enjoined two of Apple’s basic business practices: charging developers a 27% commission on certain purchases made outside of an app and restricting how developers use links for outside-app purchases. Accordingly, the court’s injunction (1) sets Apple’s commission rate for outside-app purchases at zero, and (2) dictates the terms on which Apple must deal with developers. Rather than let the market operate, the court has sought to fix the price of the goods provided and control the means of doing business. And it has done so even though no court has ever considered whether the relevant practices violate the antitrust laws-let alone found that they do.
The district court’s order thus violates core principles of evenhanded antitrust enforcement in two mutually reinforcing ways. First, the order arrogates to the court the power to micromanage private business dealings, despite clear evidence that courts are ill-equipped to regulate prices and that their doing so can chill innovation by reducing or eliminating firms’ ability to earn a return on innovations. Second, the order enjoins Apple’s practices, even though no court has performed the requisite economic analysis of those practices, much less found that they constitute any antitrust violation. This approach is antithetical to prudent, effective, and consistent application of antitrust law.
I. The district court’s order contradicts basic antitrust remedial principles, which should help guide the exercise of the court’s equitable discretion. Antitrust courts generally avoid dictating prices or other terms and conditions of parties’ dealings. That is because courts are poorly positioned to run private businesses, and there is an expectation that intrusive remedies will often thwart, rather than promote, competition and innovation.
The district court’s order here sets Apple’s commission rate at zero and directs the terms of Apple’s dealings with app developers. That draconian remedy runs counter to this Court’s and the Supreme Court’s precedents. It enmeshes the Judiciary in private transactions that, absent intervention, benefit millions of willing consumers. And if left to stand, it would discourage Apple and other technology companies from innovating, in contravention of the public interest.
II. The district court has imposed its broad injunction even though Apple has not violated the federal antitrust laws. This Court’s prior decision in this case held that Apple’s restrictions on in-app distribution and payment were consistent with the Sherman Act. Although it also held that Apple’s anti-steering provision governing developers’ communication of outside-app payment methods violated California’s Unfair Competition Law (UCL), that law sweeps more broadly than the Sherman Act to target any “unfair” business practice. In direct response to the district court’s earlier injunction aimed at the anti-steering provision, Apple established a new framework governing outside-app purchases. No court has assessed whether that framework comports with the Sherman Act or, for that matter, the UCL. Nonetheless, the district court used a contempt order to enjoin.
Apple’s new, legally untested framework. If that injunction were to stand, it would leave the district court micromanaging Apple’s business practices. And it would do so before any court has applied the standard “rule of reason” analysis to the practices that are being enjoined.
ARGUMENT
I. THE DISTRICT COURT’S ORDER VIOLATES BASIC ANTITRUST PRINCIPLES
As Apple explains (Br. 25-28), rather than ordering Apple’s compliance with the original injunction in response to its contempt finding, the district court issued a new injunction. “[I]n employing the extraordinary remedy of injunction,” a “court[] of equity should pay particular regard for the public consequences.” Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982). Thus, as with any injunction, this one can be valid only if it “is in the public interest.” Winter v. Nat. Res. Def. Council, 555 U.S. 7, 20 (2008); cf. Elkin v. Fauver, 969 F.2d 48, 52 (3d Cir. 1992) (Alito, J.) (“[C]ivil contempt sanctions should be tailored so that they do not unduly harm broad public interests.”).
Here, the district court’s order is not in the public interest because it contradicts established antitrust remedial principles. The order effectively sets Apple’s prices and dictates the terms on which it must deal with developers. Such a sweeping order is particularly untenable here, leveled in response to Apple’s modifications following a narrow, “measured” injunction based on state-law liability. Epic Games, Inc. v. Apple Inc., 559 F. Supp. 3d 898, 1069 (N.D. Cal. 2021).
A. Antitrust Courts Should Avoid Dictating Businesses’ Prices and Terms of Dealing
“As a general rule, businesses are free to choose the parties with whom they will deal, as well as the price, terms, and conditions of that dealing.” Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc., 555 U.S. 438, 448 (2009). For that reason, the Sherman Act “does not restrict the long recognized right” of a “private business[] freely to exercise [its] own independent discretion as to parties with whom [it] will deal.” United States v. Colgate & Co., 250 U.S. 300, 307 (1919). Nor does the Sherman Act mandate that a private business charge only a “fair” or “reasonable” price. Town of Concord v. Bos. Edison Co., 915 F.2d 17, 25 (1st Cir. 1990) (Breyer, J.). To the contrary, “possession of monopoly power, and the concomitant charging of monopoly prices” is “not unlawful” and “is an important element of the free-market system[,]” because “[t]he opportunity to charge monopoly prices-at least for a short period-is what attracts ‘business acumen’ in the first place.” Verizon Commc’ns Inc. v. Law Offices of Curtis v Trinka, LLP, 540 U.S. 398, 407 (2004).
Those principles accord with “the fundamental national values of free enterprise and economic competition that are embodied in the federal antitrust laws.” FTC v. Phoebe Putney Health Sys., Inc., 568 U.S. 216, 225 (2013). If firms were compelled to “share the source of their advantage” or to charge less than the market would accept, then they would have reduced incentives to invest. Trinka, 540 U.S. at 407-08. Over time, that would harm consumers and depress economic growth. Id. at 407. Critically here, intrusive judicial remedies can be particularly damaging to “technological markets, where innovation ‘is essential to economic growth and social welfare’ and ‘an erroneous decision will deny large consumer benefits.”‘ FTC v. Qualcomm Inc., 969 F.3d 974, 991 (9th Cir. 2020); cf Phillip E. Areeda and Herbert Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles and Their Application, § l 739f4(C) (2d ed. 2017) (“[I]ntellectual property is often characterized by large upfront costs, and the IP holder must earn enough to cover these as well as marginal costs.”).
The foregoing principles also recognize that “judges make for poor ‘central planners’ and should never aspire to that role.” Alston, 594 U.S. at 103. “[A]s generalists, as lawyers, and as outsiders,” courts should remain cognizant of “their limitations” when “trying to understand intricate business relationships,” id. at 106-“especially in technology markets,” Qualcomm, 969 F.3d at 990. Judges should particularly “avoid direct price administration” because it is largely impossible to “determine a ‘fair price”‘ “without acting like a rate-setting regulatory agency, the rate-setting proceedings of which often last for several years.” Town of Concord, 915 F.2d at 25; see Paul L. Joskow, Incentive Regulation in Theory and Practice: Electricity Distribution and Transmission Networks, at 293 (2014) (explaining that because judges and regulators “have imperfect information,” there is no practical way for them to ensure “optimal pricing for regulated firms”). Indeed, “[t]he reasonable price fixed today may through economic and business changes become the unreasonable price of tomorrow.” United States v. Trenton Potteries Co., 273 U.S. 392, 397 (1927).
B. The District Court’s Order Impermissibly Dictates Apple’s Prices and Terms of Dealing
The district court’s order cannot be squared with these established principles. That order sets Apple’s price for commissions on outside-app transactions at $0; and it mandates terms and conditions of Apple’s dealings with developers. And the order does so even though these specific practices governing outside-app purchases have not even been scrutinized, let alone deemed unlawful. While the court’s original injunction imposed minor limits on the terms of Apple’s dealings with developers, it was far narrower than the new injunction-as it pertained only to the anti-steering provision and did not impose sweeping prohibitions on Apple’s commissions and other dealings.
In contrast, the district court’s order here bars Apple from “[i]mposing any commission or any fee on purchases that consumers make outside an app.” Epic Games, Inc. v. Apple Inc., 2025 WL 1260190, at *45 (N.D. Cal. Apr. 30, 2025) (emphasis added). The order thus effectively sets Apple’s price for commissions on outside-app transactions at $0-precisely the type of “direct price administration” that “antitrust courts normally avoid.” Town of Concord, 915 F.2d at 25.
Because the district court simply set the rate at zero, it arguably avoided some of the administrability problems that normally accompany price setting. See id. (listing such issues). But larger problems remain. The $0 price suggests that the order is punitive-and thus an unlawful exercise of civil contempt authority. See Int’l Union, United Mine Workers v. Bagwell, 512 U.S. 821, 827-28 (1994). Indeed, both the district court and this Court had previously upheld a higher commission (30%) on in-app purchases, explaining that it was supported by a procompetitive “IP-compensation rationale.” Epic Games, Inc. v. Apple, Inc., 67 F.4th 946, 986 (9th Cir. 2023). Nor does the district court’s prohibition on imposing any price embrace the “caution” that the Supreme Court has insisted upon. Alston, 594 U.S. at 106. After all, the district court did not even attempt to contend that $0 constitutes a reasonable commission price, or to evaluate the effects of that pricing. Nor did the court plausibly explain how setting a commission rate of zero could have been “designed to compel future compliance with” the initial injunction-which addressed only Apple’s anti-steering provision and did not speak to commissions at all. Bagwell, 512 U.S. at 827.
In practice, the prohibition on commissions forces Apple to share the fruits of its labor with developers at no cost (and with no commensurate gain). Millions of consumers and developers benefit from the App Store, and Apple incurred significant costs to develop it. Apple monetizes the App Store through its commissions, rather than by charging piecemeal for developer tools, distribution, visibility, and the like. No clear alternative monetization structure exists, especially given the wide variety of developers who use the App Store. And in particular, restrictions on outside-app purchases are necessary to prevent free riding and to allow Apple to earn a return on its substantial investments.
Courts and antitrust enforcers have long understood the dangers of forced-sharing remedies like the one here. Such obligations are in “tension with the underlying purpose of antitrust law, since [they] may lessen the incentive for the monopolist, the rival, or both to invest in … economically beneficial facilities.” Trinka, 540 U.S. at 407-08. There is no “guarantee that firms will undertake the investment necessary to produce complex technological innovations knowing that any competitive advantage deriving from those innovations will be dissipated by the sharing requirement.” AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 429 (1999) (Breyer, J., concurring in part and dissenting in part). That is why “[e]ven a monopolist generally has no duty to share (or continue to share) its intellectual or physical property with a rival.” Novell, Inc. v. Microsoft Corp., 731 F.3d 1064, 1074 (10th Cir. 2013) (Gorsuch, J.); see Viamedia, Inc. v. Comcast Corp., 951 F.3d 429, 454 (7th Cir. 2020) (similar). Thus, whether viewed as price setting or compulsory sharing, the district court’s prohibition on commissions for outside-app purchases is antithetical to the goals and principles of antitrust law.
In addition to setting Apple’s commission rate at zero, the district court’s order bars Apple from “[r]estricting or conditioning developers’ style, language, formatting, quantity, flow or placement of links for purchases outside an app.” Epic Games, 2025 WL 1260190, at *45. That portion of the order directly impairs Apple’s ability to maintain its “walled-garden ecosystem,” which this Court found to benefit consumers and comply with the Sherman Act. Epic Games, 67 F.4th at 973. The district court’s decision thus undercuts the very in-app purchasing exclusivity that this Court has already upheld.
The district court’s injunction against Apple’s link restrictions also runs afoul of basic antitrust remedial principles. To begin, contrary to Supreme Court precedent, it imposes a “duty” on Apple to “deal” with developers “under terms and conditions that the [developers] find commercially advantageous.” linkLine Commc’ns, 555 U.S. at 450. But there is no sound justification for allowing courts “to pick and choose the applicable terms and conditions” of parties’ business dealings. Novell, 731 F.3d at 1073. That is why this Court and the Supreme Court have consistently rejected such remedies. See linkLine Commc’ns, 555 U.S. at 457; Trinka, 540 U.S. at 408, 415-16; Aerotec Int’l, Inc. v. Honeywell Int’l, Inc., 836 F.3d 1171, 1184 (9th Cir. 2016) (the law imposes “no duty to deal under the terms and conditions preferred by [a competitor’s] rivals”) (alteration in original).
Moreover, the “highly detailed” nature of the district court’s mandate is “beyond the practical ability of a judicial tribunal to control.” Trinka, 540 U.S. at 414-15. “An antitrust court is unlikely to be an effective day-to-day enforcer” of an order that bars Apple from imposing various content and style restrictions on developers’ links. Id. at 415. Thus, the “[c]osts associated with ensuring compliance with” the district court’s order will almost certainly “exceed efficiencies gained,” and the order itself “may unintentionally suppress procompetitive innovation.” Alston, 594 U.S. at 102. For all these reasons, the court’s new injunction contravenes “the public interest.” Winter, 555 U.S. at 32.
II. THE DISTRICT COURT IMPOSED A BROAD INJUNCTION WITHOUT AN ANTECEDENT ANTITRUST VIOLATION
The district court’s remedy is particularly egregious because no court has found that Apple’s new framework governing outside-app transactions violates the federal antitrust laws. In its prior decision in this case, this Court held that Apple’s restrictions on in-app distribution and payment satisfied the Sherman Act. At the same time, this Court found that Apple’s separate anti-steering provision violated California’s UCL, which sweeps more broadly than the Sherman Act. In response to that UCL decision, Apple established a new framework governing purchases made outside of developers’ apps. No court has subjected that new framework to a Sherman Act, or even a UCL, analysis. Nonetheless, the district court used a contempt order to level a sweeping injunction.
A. This Court Upheld Apple’s In-App Restrictions Under the Federal Antitrust Laws
“Restraints that are not unreasonable per se are judged under the ‘rule of reason.”‘ Ohio v. Am. Express Co., 585 U.S. 529, 541 (2018). That rule “requires courts to conduct a fact-specific assessment of ‘market power and market structure … to assess the [restraint]’s actual effect’ on competition.” Id. (alterations in original). In turn, the rule aims to “distinguish between restraints with anticompetitive effect that are harmful to the consumer and restraints stimulating competition that are in the consumer’s best interest.” Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 886 (2007).
To evaluate “whether a restraint violates the rule of reason, …a three-step, burden-shifting framework applies.” Am. Express, 585 U.S. at 541. First, “the plaintiff has the initial burden to prove that the challenged restraint has a substantial anticompetitive effect that harms consumers in the relevant market.” Id. Next, “[i]f the plaintiff carries its burden, then the burden shifts to the defendant to show a procompetitive rationale for the restraint.” Id. Finally, “[i]f the defendant makes this showing, then the burden shifts back to the plaintiff to demonstrate that the procompetitive efficiencies could be reasonably achieved through less anticompetitive means.” Id. at 542.
In this case, Epic previously argued that certain of Apple’s business practices-namely, restricting app distribution on Apple devices to the App Store and requiring that in-app purchases on Apple devices use Apple’s in-app payment process (IAP)-are unlawful under the rule of reason. As relief, Epic sought “a pathway for developers to bypass Apple’s 30% commission” on in-app purchases. Epic Games, 67 F.4th at 970.
This Court rejected Epic’s arguments. At step two of the rule-of reason analysis, this Court determined that “Apple offered non- pretextual, legally cognizable procompetitive rationales for its app distribution and IAP restrictions.” Id. at 985. Specifically, those restrictions “‘improve device security and user privacy-thereby enhancing consumer appeal”; and they ensure that Apple can “be compensated” for its immense “IP investment.” Id. at 986. And at step three, this Court affirmed the district court’s finding “that Epic failed to prove the existence of substantially less restrictive alternatives” that would “achieve Apple’s procompetitive rationales.” Id. at 990.
To be sure, this Court also affirmed the district court’s finding that Apple’s anti-steering provision-under which app developers were generally barred from communicating outside-app payment methods violated California’s UCL, which sweeps beyond federal antitrust law to prohibit any “unfair” business practice. Cal. Bus. & Prof. Code§ 17200; see Epic Games, 67 F.4th at 999-1000. Specifically, this Court predicted that California courts would find Apple’s anti-steering provision to be unfair under the UCL because it could “decrease [consumer] information.” Id. at 1000-01 (alteration in original). But that liability finding produced only a limited injunction barring “Apple from prohibiting developers [from] includ[ing] in their Apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to IAP.” Epic Games, 559 F. Supp. 3d at 1058. That targeted injunction, which the district court itself described as a “measured remedy,” id. at 1068—69, said nothing about other essential restrictions that Apple employs to protect the IAP’s integrity. Nor did it reference in any way, much less eradicate, Apple’s freedom to charge developers a commission. In fact, the district court’s original decision referenced commissions with approval, explaining that they prevent developers from exploiting “Apple’s innovation and intellectual property free of charge.” Id. at 1042 n.617.
The district court’s recent decision nonetheless contends that Apple somehow defied its prior injunction by, among other things, “select[ing] a 3% discount on its 30% IAP commission that it knew was anticompetitive.” Epic Games, 2025 WL 1260190, at *36. That description misapprehends this Court’s prior decision. It is true that at step one of the rule-of-reason analysis, this Court found no clear error in the district court’s decision to credit “Epic’s evidence of supracompetitive pricing.” Epic Games, 67 F.4th at 984. But this Court then specifically determined that Apple’s conduct-including its 30% commission rate on in-app purchases-was lawful under the rule of reason. Id. at 985-86. To eliminate a discounted 27% commission on outside-app purchases and impose a zero-dollar requirement makes little sense when a 30% commission on in-app purchases was already deemed lawful.
B. The District Court’s Order Unjustifiably Bars Business Practices that Have Never Been Deemed Unlawful
In response to the district court’s original injunction, Apple eliminated its anti-steering provision, which had prevented app developers from steering customers toward outside-app purchases. Apple implemented a new framework under which developers could include buttons, links, and other calls to action steering users to purchase alternatives outside the app, so long as the content did not disparage IAP or appear “on any page that is part of an in-app flow to merchandise or initiate a purchase using in-app purchase.” 4-ER-760. In other words, developers could steer users anywhere they wanted, so long as they did not divert customers who were en route to making an in-app purchase. Under the new framework, if a user taps on a link, continues to the developer’s website, and completes the transaction within the next seven days, Apple receives a 27% commission. 4-ER-762.
Using the form of a contempt order, the district court granted a new, punitive injunction barring these new business practices. As noted above, the order prohibits Apple from “[i]mposing any commission or any fee on purchases that consumers make outside an app.” Epic Games, 2025 WL 1260190, at *45. And it further prohibits Apple from “[r]estricting or conditioning developers’ style, language, formatting, quantity, flow or placement of links for purchases outside an app.” Id. In other words, developers can now divert users from anywhere inside an app to anywhere they choose outside the app, and Apple can receive no compensation whatsoever.
The district court’s order disregards the judicial “caution” necessary in antitrust cases. Alston, 594 U.S. at 106. At the liability stage, “the rule of reason is [designed] to furnish ‘an enquiry meet for the case, looking to the circumstances, details, and logic of a restraint’ to ensure that it unduly harms competition before a court declares it unlawful.” Id. at 97. Antitrust courts thus “must give wide berth to business judgments before finding liability.” Id. at 102. Similarly, at the remedial stage, “[J]udges must resist the temptation to require that enterprises employ the least restrictive means of achieving their legitimate business objectives.” Id. at 106. And they “must remain aware that markets are often more effective than the heavy hand of judicial power when it comes enhancing consumer welfare.” Id.
Here, rather than perform the requisite economic analysis to evaluate or promote consumer welfare, the district court simply defaulted to draconian measures. If left to stand, the resulting order would micromanage Apple’s new business practices even though no court has deemed those practices unlawful. Id. at 106. Apple’s new practices governing external links and outside-app purchases have never been subjected to the “fact-specific” rule-of-reason framework. Am. Express, 585 U.S. at 541. Although the district court labeled Apple’s new practices “anticompetitive” in conclusory fashion, it never performed the analysis needed to make that determination. Epic Games, 2025 WL 1260190, at *34. Nor is there any basis to presume anticompetitive effects. To the contrary, this Court previously upheld Apple’s higher commission of 30% for in-app purchases, and Apple’s commissions plainly promote competition by allowing it to monetize its investments, thus incentivizing innovation.
As a general rule, courts “must base [their] relief on some clear ‘indication of a significant causal connection between the conduct enjoined or mandated and the violation found.”‘ United States v. Microsoft Corp., 253 F.3d 34, 105 (D.C. Cir. 2001) (en banc). Such a causal connection is absent here: The district court imposed broad remedies-in the form of price setting and compulsory sharing-even though no antitrust analysis was performed, and no antitrust violation has been found. See Authenticom, Inc. v. CDK Glob., LLC, 874 F.3d 1019, 1021 (7th Cir. 2017) (vacating injunction that went “well beyond the scope of the [antitrust] violation”).
The district court’s order also has substantial practical consequences. Apple made significant investments to create the iPhone and develop the iOS ecosystem. Forcing Apple to give developers access to its intellectual property without reasonable compensation-as the district court’s order does-invites free riding and discourages the type of “risk taking that produces innovation and economic growth.” Trinka, 540 U.S. at 407. Indeed, “[f]irms and investors are generally willing to incur the large costs needed to obtain meaningful innovations only because they expect to obtain a significant return on those investments.” Jorge Padilla, Douglas H. Ginsburg, & Koren W. Wong-Ervin, Antitrust Analysis Involving Intellectual Property Rights and Standards: Implications from Economics, 33 Harv. J. L. & Tech. No. 1, 2-22 (Fall 2019). And when the law discourages innovation, the ultimate losers are consumers. See Garlick Distrib. Ctrs., LLC v. Car Sound Exhaust Sys., Inc., 723 F.3d 1019, 1026 (9th Cir. 2013) (observing that “free-riding could ultimately hurt consumers”).
At base, a court ill-equipped to micromanage a highly technical and popular marketplace has chosen to do so, without even analyzing the very provisions that it decided to ban. That approach is not marked by the caution and circumspection that the Supreme Court has called for in the antitrust context and is especially likely to generate unintended-and unwanted-consequences.
CONCLUSION
The district court’s order contravenes sound application of the antitrust laws.
[1] No party or party’s counsel authored this brief in whole or in part, and no one other than amici and their counsel have made a monetary contribution to this briefs preparation and submission. Cooley represents Apple in other unrelated matters, and some amici may be affiliated with firms that similarly represent Apple in other unrelated matters. Defendant-Appellant consented to the filing of this brief, while Plaintiff-Appellee did not. Accordingly, this brief accompanies a motion for leave to file it.
[2] Unless otherwise indicated, all internal citations and quotations are omitted.