Several legal and business groups, in addition to the U.S. government, filed briefs with the Supreme Court this week in the Apple vs. Epic Games lawsuit, urging the justices to reverse at least part of the contempt ruling against Apple. Here are the details.
A bit of context
In late June, the U.S. Supreme Court agreed to hear Apple’s argument that a civil contempt ruling against the company should be reversed in its fight against Epic Games.
In essence, when Apple was compelled to allow developers to direct users to external purchasing options, the company did so while imposing a 27% commission on those transactions. When Epic challenged Apple’s implementation, the district court found the company in civil contempt.
Apple has been allowing developers to link to external purchasing options without charging a commission ever since.
Since then, the company has been trying to reverse that ruling, arguing that the actual text of the injunction did not prohibit it from charging a commission, and that lower courts improperly relied on the “spirit of the injunction” to find the company in contempt.
For reference, the original order read:
Apple Inc. and its officers, agents, servants, employees, and any person in active concert or participation with them (“Apple”), are hereby permanently restrained and enjoined from prohibiting developers from (i) including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.
Last week, Apple filed its official opening merits brief with the Supreme Court, arguing once again that the contempt ruling should be overturned because the original injunction did not clearly prohibit the company from charging a commission on purchases made outside the App Store.
In its briefing, Apple also argued that allowing the contempt finding to stand would increase the risk of judicial overreach when courts enforce injunctions, leaving companies uncertain about what conduct an order actually prohibits.
U.S. government and other groups weigh in
While Epic Games has until November 13 to file its response, the court this week received a number of amicus briefs (filings from outside interested parties) from the U.S. Department of Justice, through the Solicitor General’s office, along with several legal and business groups weighing in on Apple’s challenge.
In its amicus brief, the Department of Justice argues that “[c]ivil contempt is […] appropriate only if the defendant’s conduct is clearly covered by the injunction’s express terms,” which it says was not the case with Apple’s decision to charge a 27% commission.
It goes on to echo Apple’s argument that civil contempt is improper whenever there is a “fair ground of doubt” as to whether an injunction actually prohibited the conduct at issue, concluding that the Supreme Court “should reverse the contempt finding as to the 27% commission.”
In the same brief, however, the Department of Justice says the lower courts were right to hold Apple in contempt over its “plain button” restriction, arguing that the injunction clearly required Apple to permit both buttons and links, while Apple’s implementation effectively allowed only links.
On the remaining issues, such as restrictions on where external purchase links could appear, the Department of Justice says the Supreme Court should set aside the existing rulings and send them back to the lower courts to be reconsidered under the “fair ground of doubt” standard.
In addition to the Department of Justice, the Supreme Court also received amicus briefs from:
- The Chamber of Commerce of the United States
- Chamber of Progress
- Former Federal Antitrust Enforcers
- International Center for Law and Economics (ICLE)
- Computer & Communications Industry Association, NetChoice, and Software & Information Industry Association
- Washington Legal Foundation (WLF)
In short, they all support the general argument that Apple could not properly be held in civil contempt for conduct that the injunction did not clearly prohibit, and that courts should enforce injunctions based on their actual terms rather than their perceived “spirit.”
The ICLE adds that “choosing a profitable way to comply is still compliance,” while the Former Federal Antitrust Enforcers cited past precedent to argue that having judges determine what commission Apple may charge “is precisely the type of ‘direct price administration’ that ‘antitrust courts normally avoid.’”
Currently, proceedings are underway in the district court to determine how much, if any, commission Apple may charge on linked-out purchases, while the Supreme Court reviews the contempt ruling itself.
You can read the Department of Justice’s full brief below. For the other amicus briefs, follow the links above.
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