'Retitle- Count 9 Summary - Part C. Balance of Equities'

4. Summary

C. Balance of Equities

1. Fortnite

As the Court stated in its prior order:

The battle between Epic Games and Apple has apparently been brewing for some time. It is not clear why now became so urgent. The Cameroncase which addresses the same issues has been pending for over a year, and yet, both Epic Games and Apple remain successful market players. If plaintiffs there, or here, prevail, monetary damages will be available and injunctive relief requiring a change in practice will likely be required. Epic Games moves this Court to allow it to access Apple's platform for free while it makes money on each purchase made on the same platform. While the Court anticipates experts will opine that Apple's 30 percent take is anti-competitive, the Court doubts that an expert would suggest a zero percent alternative. Not even Epic Games gives away its products for free.

Thus, in focusing on the status quo, the Court observes that Epic Games strategically chose to breach its agreements with Apple which changed the status quo. No equities have been identified suggesting that the Court should impose anew status quo in favor of Epic Games.

Epic Games , 2020 WL 5073937, at 4 (Dkt. No. 48 at 6).The Court's prior findings remain instructive in addressing the parties’ arguments: Epic Games advances two arguments for why the balance of equities tilt sharply in its favor with respect to Fortnite. First, Epic Games dismisses Apple's concern that an injunction with respect to Fortnite would set off a rash of other developers breaching their agreements, and asserts that any harm to Apple would be limited to loss of commissions for a short time, "which is harm easily compensable by damages." (Mot. at 30 (Dkt. No. 61 at 37).) Second, the balance tilts towards  Epic Games where the injunction seeks to ensure that Apple complies with antitrust laws.

Epic Games does not persuade on either of these two bases. As discussed, Epic Games has not made a preliminary showing of the likelihood of success on its claim. Therefore, it is not yet established that such an injunction reinstating Fortnite would issue in compliance with antitrust laws. Moreover, Epic Games’ argument with respect to damages only demonstrates that the harm to Fortnite is not irreparable. As Epic Games states, the loss of commissions to Apple would be for a short duration and would be "easily compensable ...." The converse is also true.

Finally, the Court finds that the balance of equities weighs toward Apple where Epic Games breached both its agreements and the guidelines, and an injunction would potentially incentivize similar breaches among developers. Epic Games does not dispute that it breached its agreements. Nor is a breach required to maintain or even commence this lawsuit as reflected by the fact that the named plaintiffs in Cameron did not breach their agreements. As explained herein, Epic Games can similarly proceed. The Court declines to incentivize breaches of contracts where the legality of those provisions has not yet been conclusively or presumptively determined to be illegal.

In sum, no equities have been identified suggesting that the Court should impose a new status quo in favor of Epic Games. The balance of equities tilts sharply toward Apple on the issue of Fortnite.

2. Epic Affiliates

By contrast, the Court finds that the balance of equities weighs in favor of Epic Games and the Epic Affiliates, including as to Unreal Engine, on the issue of continued access to developer tools and the App Store for the Epic Affiliates. As the Court previously found:

[W]ith respect to the Unreal Engine and the developer tools, the Court finds the opposite result. In this regard, the contracts related to those applications were not breached. Apple does not persuade that it will be harmed based on any restraint on removing the developer tools. The parties’ dispute is easily cabined on the antitrust allegations with respect to the App Store. It need not go farther. Apple has chosen to act severely, and by doing so, has impacted non-parties, and a third-party developer ecosystem. In this regard, the equities do weigh against Apple.

Epic Games , 2020 WL 5073937, at 4 (Dkt. No. 48 at 6). The Court finds that this analysis remains unchanged. The only equity that Apple has identified concerns an alleged potential "trojan horse" or insertion of malicious code by Epic Games or the Epic Affiliates. The Court rejects this argument for the same reasons discussed under the irreparable harm factor. The modification in the preliminary injunction to ensure continued compliance with the operating agreements and guidelines addresses this issue.

Apple's aggressive targeting of separate contracts in an attempt to eradicate Epic Games and its affiliates fully from the iOS platform was unnecessary and imperiled a thriving third-party developer ecosystem. Providing continued access for the Epic Affiliates to developer tools and the App Store preserves the status quo. Accordingly, the balance of equities tilts sharply toward Epic Games on the issue of continued access to developer tools and the App Store for the Epic Affiliates.

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This court case 4:20-cv-05640-YGR published on Oct 9, 2020, is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction.