ICLE Brief to the Ninth Circuit on Stay of Permanent Injunction in Epic Games v Google
STATEMENT OF INTEREST
The International Center for Law & Economics (“ICLE”) is a nonprofit, non-partisan global research and policy center aimed at building the intellectual foundations for sensible, economically grounded policy. ICLE promotes the use of law and economics methodologies and economic learning to inform policy debates and has longstanding expertise evaluating antitrust law and policy.
ICLE has an interest in ensuring that antitrust law promotes the public interest by remaining grounded in sensible rules informed by sound economic analysis. That includes advising against improperly excessive antitrust remedies that could deteriorate the quality of mobile ecosystems, thereby harming the welfare of consumers and app developers.[1]
INTRODUCTION AND SUMMARY OF ARGUMENT
The Court should grant Google’s motion to stay the district court’s injunction, given several significant problems with the district court’s order.
First, the injunction imposes a duty to deal with competitors, a measure rejected by the Supreme Court in all but the most extreme circumstances. See Verizon Commc’ns Inc. v. Law Offices of Curtis v. Trinko, LLP, 540 U.S. 398 (2004). In affirming, the panel brushed Trinko aside, saying that it addressed the question of “liability” for a refusal to deal, not the question of an appropriate “remedy” given a finding of liability. But the Supreme Court has made clear that its concerns in Trinko—deterring investment, inviting regulatory supervision, and enlisting courts as “central planners”—apply equally to remedies. See Nat’l Collegiate Athletic Ass’n v. Alston, 594 U.S. 69, 102 (2021) (quoting Trinko, 540 U.S. at 415). Trinko’s skepticism about forced sharing is rooted in both the difficulty of crafting and supervising such remedies and the market distortions they are likely to entail. 540 U.S. at 408, 411, 415.
Second, the district court’s injunction mandates that Google stop lawful conduct without establishing the requisite causal relationship between that relief and the conduct that was found unlawful. But courts have rightly tended to reject remedies untethered from the conduct they are supposed to remedy. Thus, Optronic Techs., Inc. v. Ningbo Sunny Elec. Co., 20 F.4th 466 (9th Cir. 2021) and United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) require a clear indication of a significant causal connection between the particular remedy and the particular violation. See Optronic, 20 F.4th at 486 (quoting Microsoft, 253 F.3d at 105). The district court’s opinion establishes no such connection: Its rationale for the app-store distribution provision is a single paragraph focused on a single witness; its catalog-access provision is justified largely by loose and highly generalized network-effects rhetoric—an economic wave of the hand, not proof that the mandate will remedy the violation, least of all for developers not party to the suit. Based on a finding of harm to a single plaintiff, the injunction would require a universal redesign of Google Play. While this may benefit some developers, it would manifestly harm many others. Yet the court did not establish that this intervention was either proportionate or necessary to remedy the adjudicated injury. It is thus inconsistent with established authority.
Third, the injunction runs afoul of the Supreme Court’s view of universal injunctions in Trump v. CASA, Inc., 606 U.S. __ (2025). That decision makes clear the general impropriety of sweeping, system?wide relief affecting non-parties with heterogeneous interests and that courts should not use universal injunctive “relief” to achieve de facto regulation. CASA’s logic—the relationship between who is injured and the scope of an injunction—applies with particular force in private antitrust suits governed by procedural limits (antitrust injury) aimed at ensuring that courts address only direct injuries to specific plaintiffs. Here the injunction would not only force Google to aid its direct competitors by granting them a privileged position in its Android operating system, it would also redesign Android for over 100 million non-party U.S. users and more than 500,000 non-party app developers, potentially exposing them to lax data security, ecosystem fragmentation, increased risks of fraud and piracy, and the degradation of platform value these entail.
The harms threatened by the injunction are certain, immediate, and irreversible: a fundamental restructuring of the Android ecosystem, an erosion of user trust, and a permanent alteration of relationships with developers and device manufacturers. By imposing novel, quasi-regulatory duties on Google that are not borne by its chief competitor, the order threatens to distort the competitive landscape, chill incentives for platform innovation, and, ultimately, harm consumers by degrading a major product in the market. A stay would not merely protect one party from irreparable harm but would help ensure that a contested remedy does not itself become a source of anti-competitive instability before its legal and economic implications are fully reviewed.
ARGUMENT
I. THE PANEL’S AFFIRMANCE OF THE DISTRICT COURT’S DUTY-TO-DEAL INJUNCTION MISCONSTRUES SUPREME COURT PRECEDENT
The district court’s injunction mandates that Google deal with rivals. Trinko strongly cautions against such mandates. The panel addressed Trinko by suggesting that it does not apply because the Trinko Court was concerned solely about liability, not remedies. Op., 45–46, Dkt. No. 200.1. That is simply wrong. Rather, as the Supreme Court plainly held in Alston—quoting Trinko’s concerns about chilling investment, facilitating collusion, and forcing courts to act as “central planners”—“[s]imilar considerations apply” when crafting remedies. 594 U.S. at 102 (quoting Trinko, 540 U.S. at 415). Trinko places mandates to deal “at or near the outer boundary of § 2 liability” precisely because such forced sharing is a remedial morass: it blunts incentives (for the platform and for rivals), invites ongoing judicial oversight, and risks suppressing procompetitive innovation. 540 U.S. at 409, 411, 415; see also Novell, Inc. v. Microsoft Corp., 731 F.3d 1064, 1073 (10th Cir. 2013) (Gorsuch, Circuit Justice).
Indeed, compelling a firm to deal with rivals on court?supervised terms implies the very anticompetitive harm that refusal?to?deal doctrine hedges against, effectively short?circuiting the rule?of?reason analysis. A remedy that mandates the distribution of app stores is tantamount to a determination that the failure to distribute constitutes a violation of the law; and imposing a duty to deal without a showing of anticompetitive effect imposes liability by inference. See Herbert Hovenkamp, Unilateral Refusals to Deal, Vertical Integration, and the Essential Facility Doctrine, U. Iowa Leg. Stud. Rsrch. Paper No. 08-31, 28 (Jul. 14, 2008), http://bit.ly/33Q5fIM (“[Unilateral refusal to deal under §2] comes dangerously close to being a form of ‘no?fault’ monopolization.”). This risks mistakenly condemning legitimate business arrangements, which, the Supreme Court has held, is “‘especially costly, because [it] chill[s] the very’ procompetitive conduct ‘the antitrust laws are designed to protect.’” Alston, 594 U.S. at 99 (quoting Tinko, 540 U.S. at 414). This risk of mistaken condemnation fairly compels a stay here.
II. THE PANEL WRONGLY UPHELD THE SCOPE OF THE DISTRICT COURT’S INJUNCTION, WHICH IS NOT TAILORED TO THE HARM FOUND AT TRIAL
The panel relied on Optronic to justify the scope of the district court’s injunction. Op., 42-43 (quoting Optronic, 20 F.4th at 486 (“the available injunctive relief is broad[.]”). But not all available remedies are proper ones. To the contrary, Optronic emphasizes that injunctive remedies must rest on a “clear indication of a significant causal connection between the conduct enjoined or mandated and the violation found,” and must be a reasonable method of remedying the proven harm. 20 F.4th at 486 (quoting Microsoft, 253 F.3d at 105). The district court’s injunction fails both the causal nexus and proportionality requirements.
A. The injunction fails to demonstrate a causal nexus with the harm adjudicated
In Microsoft, the D.C. Circuit vacated the district court’s remedy because the district court failed to explain how the ordered relief would “unfetter [the] market from anticompetitive conduct,” and because structural relief “designed to eliminate the monopoly altogether” required a clearer indication of causation than the inferences the district court had relied upon. 253 F.3d at 103, 106–07 (quoting Ford Motor Co. v. United States, 405 U.S. 562, 577 (1972)). Here, the district court’s remedy should have fared no better. The district court’s justification for the app-store-distribution mandate is a single paragraph, anchored in one witness’ testimony about sideloading friction and the number of steps some users encountered. Order re UCL Claim and Injunctive Relief, 12, In re Google Play Store Antitrust Litig., 3:20-cv-05671-JD, Dkt. No. 701. That does not demonstrate that forcing Google to carry rival stores (as opposed to less intrusive alternatives) is causally tied to any proven violation.
The “catalog access” provision fares no better. The district court leaned on network effects, but those are a feature of platform markets, not anticompetitive conduct to be rectified. Id. Treating network effects as a license for compelled access improperly converts a mundane market feature with no inherent anticompetitive significance into a causal nexus. See Microsoft, 253 F.3d at 106–07 (requiring specific, demonstrated causal connection at the remedy stage, not conjecture); Catherine Tucker, Network Effects and Market Power: What Have We Learned in the Last Decade? ANTITRUST, Spring 2018, 72–79) (“[N]ew findings suggest that network effects are not the guarantor of market dominance.”).
More fundamentally, the district court did not establish how either remedy is causally related to the supposed problem. Users can and do obtain particular apps through multiple channels, and rivals can compete for distribution of specific apps without mirroring the entire catalog. In fact, the connection between the conduct to be remedied and the alleged harm was specifically disclaimed by Jury Instruction No. 24: “It is not unlawful for Google to prohibit the distribution of other app stores through the Google Play Store, and you should not infer or conclude that doing so is unlawful in any way.” Final Jury Instrs., 33, In re Google, 3:20-cv-05671-JD, Dkt. No. 592. The district court’s injunction therefore has no demonstrated causal nexus with the Epic’s anticompetitive harm, and this applies a fortiori to third parties.
B. The injunction is disproportionate to the harm adjudicated
An antitrust injunction must reflect a “proportionality between the severity of the remedy and the strength of the evidence of the causal connection,” and the “[m]ere existence of an exclusionary act does not itself justify full feasible relief….” United States v. Microsoft, 231 F. Supp. 2d 144, 164 (D.D.C. 2002), aff’d sub nom. Massachusetts v. Microsoft Corp., 373 F.3d 1199 (D.C. Cir. 2004) (quoting 3 Areeda & Hovenkamp, Antitrust Law ¶650a, 67).
The district court’s injunction here goes far beyond “stopping” the allegedly exclusionary act; it mandates that Google create and maintain new modes of business—hosting rival stores and exposing Play’s catalog—under continuing judicial supervision. But ordering a firm to expand or reconfigure facilities puts courts “nearly in the shoes of the regulator.” Hovenkamp, supra, at 25. Such a remedy could be proportionate only to the most severe, widespread, and pervasive anticompetitive conduct—nowhere near what was presented on the facts here.
A critical distinction also separates this case from Microsoft (and from classic precedents like Associated Press v. United States, 326 U.S. 1 (1945)): those cases addressed discriminatory restrictions that prevented others—intermediaries or members—from dealing with rivals. The appropriate remedy was to prohibit the discrimination and require equal terms for similarly situated actors. See also Optronic, 20 F.4th at 486 (injunction curing discriminatory terms). Here, by contrast, the district court mandates that Google provide a brand-new form of access it has never offered: distribution of rival app stores in Play and wholesale access to its curated catalog. Cf. Garcia v. Google, 786 F.3d 733, 740 (9th Cir. 2015) (explaining difference between mandatory and prohibitory injunctions and noting that mandatory injunctions are “particularly disfavored”). As this Court’s decision in MetroNet Servs. Corp. v. Qwest Corp. holds, Trinko does not require a defendant to provide access to a competitor if it isn’t already providing access elsewhere. 383 F.3d 1124, 1132 (9th Cir. 2004). Even Associated Press refused to embrace a “public utility concept” obliging a firm to deal with all newcomers; its remedy simply forbade discriminatory denial of admission. See Hovenkamp, supra, at 10–11.
III. THE PANEL’S HOLDING IS INCONSISTENT WITH SUPREME COURT JURISPRUDENCE LIMITING THE COURT’S AUTHORITY TO REMEDY PURPORTED SYSTEM-WIDE HARM TO NON-PARTIES
Supreme Court precedent establishes that there must be a relationship between the harm found and the remedy imposed and the remedy must relate to the plaintiff’s injuries, not those of non-parties. See Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104, 111–13 (1986) (requiring antitrust injury “‘that flows from that which makes defendants’ acts unlawful’” for injunctive relief under Section 16) (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977)).
The district court’s remedial order that Google must (i) host rival app stores inside Play and (ii) open Play’s catalog to rival stores necessarily regulates the entire Android mobile?distribution ecosystem. It gives potential benefits to some non-parties and imposes costs and risks on other non-parties, many of whom may be harmed by reduced security or by fragmentation they did not seek and do not want. The injunction is contrary to the rule that relief in private antitrust enforcement actions must be tailored to plaintiffs’ injury.
Antitrust injunctions can incidentally affect non-parties. But the classic examples involve nondiscrimination obligations—in which equal treatment requires an order running across similarly situated customers or suppliers. See, e.g., Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 483–86 (1992); Optronic, 20 F.4th at 486 (approving relief that eliminated discriminatory terms and ensured access on comparable terms). What was ordered here is categorically different: a new duty to provide across-the-board access where no such access was previously ever offered.
Trump v. CASA confirms that injunctive relief must be tailored to the parties before the court and may not be used to deliver de facto, class?wide remedies to non-parties. In CASA, the Court drew a sharp line between (i) injunctions that give plaintiffs “complete relief between the parties” even if they incidentally advantage others, and (ii) injunctions designed to confer direct relief on absent persons. Trump v. CASA, slip op. 17 (citing Califano v. Yamasaki, 442 U.S. 682, 702 (1979) (“[I]njunctive relief should be no more burdensome to the defendant than necessary to provide complete relief to the plaintiffs” (emphasis added by CASA Court)). See also CASA, slip op. 15–19 (explaining that party?specific orders may have “incidental” spillover benefits, but “complete relief” is not “universal relief”).
That logic applies here. Indeed, Section 16 of the Clayton Act authorizes injunctions to prevent “threatened loss or damage” to the plaintiff, not to redesign an industry for the benefit of non-parties. See Zenith Radio Corp. v. Hazeltine Rsch., Inc., 395 U.S. 100, 130 (1960) (“[Section] 16 of the Clayton Act, which was enacted by the Congress to make available equitable remedies previously denied private parties, invokes traditional principles of equity and authorizes injunctive relief upon the demonstration of ‘threatened’ injury.”).
CASA requires that any injunction should be limited to eliminating the challenged restraints as to the named plaintiff’s proven antitrust injury. Market?wide relief for all app developers or all app store providers is improper. See CASA, slip op. 12–15 (rejecting attempts to use universal injunctions as a shortcut around class procedures).
While an Epic?specific order here may properly yield incidental marketplace effects, equity forbids crafting an order for the purpose of conferring direct benefits on non-parties. Yet that is what the injunction does in mandating platform?wide entitlements for “all developers.”
In that respect, the panel’s reliance on Zenith is misplaced. Zenith does not confer carte blanche to impose any remedy that promotes competition. Rather, while the antitrust remedy in that case went beyond the specific source of harm identified, it was applied to the same locus of harm—i.e., against likely conduct by the same defendant against the same plaintiff. Zenith, 395 U.S. at 131; id. at 132 (quoting NLRB v. Express Publ’g Co., 312 U.S. 426, (1941)). But a broad injunction to prevent an end-run around the court’s ruling with respect to the specific plaintiff whose injury had been adjudicated is a world apart from a market-wide injunction based on the claim of a single market participant.
Likewise, the claim that “district courts are ‘clothed with “large discretion” to . . . pry open to competition a market that has been closed by defendants’ illegal restraints’” is misapplied. Op., 42 (quoting Ford Motor Co. v. United States, 405 U.S. 562, 573, 577–78 (1972)). The Supreme Court has repeatedly distinguished between the government’s role in obtaining broad, structural relief (as in Ford Motor) and the constraints on private plaintiffs who must show antitrust injury, and whose relief must be tethered to their threatened loss. And even the government faces limits. See Microsoft, 253 F.3d at 103, 106–07 (vacating remedy obtained by the U.S. Department of Justice).
The district court’s non?class injunction that effectively regulates a national platform and imposes costs on non-parties with divergent interests is outside traditional equitable principles and thus at odds with Supreme Court precedent.
[1] The amici represent that no party’s counsel authored this brief in whole or in part, no party or party’s counsel contributed money that was intended to fund preparing or submitting this brief, and no person—other than amici and their counsel—contributed money that was intended to fund preparing or submitting the brief. Amici file this brief with the consent of Google LLC.