Case 4:20-cv-05640-YGR Document 925 Filed 04/23/24 Page 1 of 3
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`EPIC GAMES, INC.,
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`Plaintiff,
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`vs.
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`APPLE INC.,
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`Defendant.
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`Case No. 4:20-cv-05640-YGR
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`ORDER SETTING EVIDENTIARY HEARING
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`Re: Dkt. No. 897
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`Pending before the Court is plaintiff Epic Games, Inc.’s request to find defendant Apple, Inc.
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`in civil contempt for failing to abide by this Court’s injunction, which requires it to implement
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`certain practice changes relative to in- and out-of-app purchases. Having carefully considered the
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`briefing and for the reasons articulated below, the Court FINDS an evidentiary hearing is necessary to
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`explore the factual bases for plaintiff’s motion and SETS such a hearing, subject to the parameters
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`specified herein. Given the Court’s schedule, including a five-defendant three-month trial to begin
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`this June, the hearing shall be held on Wednesday, May 8, 2024 at 8:30 a.m. To the extent
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`proceedings have not concluded, they shall resume on Friday, May 10, 2024 at 12:00 p.m. and
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`again on Friday, May 17, 2024 at 8:30 a.m.
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`The Court begins by briefly summarizing the procedural history. On September 10, 2021,
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`after a bench trial, the Court ruled that certain anti-steering provisions, such as those in Apple’s App
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`Store Review Guidelines (the “Guidelines”), violate the unfairness prong of California Unfair
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`Competition Law (“UCL”), Cal. Civ. Code § 17200, et seq., because they “hide critical information
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`from consumers” relative to alternate payment methods, thereby “illegally stif[ling] consumer
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`choice.” (Dkt. No. 812 at 3, 162–67.) The Court subsequently crafted and entered a permanent,
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`nationwide injunction requiring Apple to implement practice changes. The injunction survived
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`appeal and remains in force.
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`On January 16, 2024, Apple filed a notice identifying steps taken to comply with the
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`injunction. (See generally Dkt. No. 871.) On March 13, 2024, Epic Games filed the pending motion
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`Case 4:20-cv-05640-YGR Document 925 Filed 04/23/24 Page 2 of 3
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`to enforce the injunction, asserting that, contrary to Apple’s representations, the company’s “new
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`App Store policies continue to impose prohibitions on developers that this Court found unlawful and
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`enjoined.” (Dkt. No. 897, Motion to Enforce the Injunction (“Mot.”) at 6:2–3.) Plaintiff seeks as relief
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`a Court order: (i) holding Apple in civil contempt for violating the injunction; (ii) requiring Apple to
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`promptly bring its policies into compliance; and (ii) requiring Apple to remove all anti-steering
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`provisions in Section 3.1.3 of the Guidelines. Thus, Epic Games requests that this Court invoke its
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`“inherent authority to enforce compliance with its order[] through a civil contempt proceeding.”
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`Craters & Freighters v. Daisychain Enterprise, 2014 WL 2153924, at *1 (N.D. Cal. May 22, 2014).
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`To succeed on such a motion, Epic Games must show, by clear and convincing evidence, that
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`(1) Apple violated the injunction, (2) its violation was “beyond substantial compliance,” and (3) its
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`conduct was “not based on any good faith and reasonable interpretation of the injunction.” United
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`States v. Bright, 596 F.3d 683, 694 (9th Cir. 2010) (cleaned up). “[T]he proper practice,” when a
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`party is alleged, as here, to be in contempt of court, is “to require the [purported] offender to appear
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`and show cause why he should not be punished.” Cooke v. United States, 267 U.S. 517, 535 (1925);
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`see also Int’l Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 827 (1994) (“[C]ivil
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`contempt sanctions . . . may be imposed in an ordinary civil proceeding upon notice and an
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`opportunity to be heard.”).
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`Here, Epic Games makes three primary arguments regarding Apple’s alleged non-
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`compliance with the injunction. One, “the web of technical requirements, economic hurdles, and
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`user frictions imposed through Apple’s new policies” serve as “a de facto prohibition on [e]xternal
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`[l]inks” in violation of the injunction. (Mot. at 19:26–27; 20:2–3.) Two, Apple’s new commission
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`structure for out-of-app purchases made after a user clicks an external link “alone frustrate[s] the
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`purpose of the [i]njunction.” (Mot. at 19:25–26.) Three, the plain text of Section 3.1.3 of the
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`Guidelines, as further revised by Apple, violates the injunction by prohibiting covered apps from,
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`“within the app, encourag[ing] users to use a purchasing method other than in-app purchase.” (Dkt.
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`No. 874, Notice of Compliance, Corrected Ex. 1, Guidelines § 3.1.3.) Epic Games supports these
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`arguments with screenshots of Apple’s required system disclosure sheet and developer-oriented web
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`pages, as well as by reference to the Guidelines and related addenda, as well as other materials.
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`Case 4:20-cv-05640-YGR Document 925 Filed 04/23/24 Page 3 of 3
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`Having reviewed these arguments and the supporting documentation relevant thereto, the
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`Court FINDS that Epic Games has made a sufficient preliminary showing that, viewed holistically,
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`Apple’s practice changes undermine the spirit of the injunction by limiting competition, impeding
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`the free flow of information, and constraining user choice. The Court SETS an evidentiary hearing to
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`further assess Epic Games’ arguments as well as Apple’s defenses.
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`Parties are advised that parameters shall apply to the topics raised at the hearing. Namely, the
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`parties shall provide evidence concerning the following: (i) the external link entitlement program
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`and related requirements, technical or otherwise; (ii) the decision-making process relative to Apple’s
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`commission structure for out-of-app purchases and impact of such structure, especially given the
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`payment structure which exists for physical items or other items outside of the app; (iii) Section
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`3.1.3 of the Guidelines; and (iv) out-of-app communications between developers and users.
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`The Court anticipates discussion of this process will touch on the Analysis Group report
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`referenced in Alex Roman’s sealed declaration. Thus, Apple is ORDERED to lodge the report under
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`seal and provide it to opposing counsel by Friday, April 26, 2024. Further, Roman SHALL attend in
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`person. If for whatever reason Roman is unavailable, the Court will accept a designee in his stead,
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`although such designee must have also been involved in the process of designing the revised
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`commission structure, including the presentation of such structure to the Price Committee, and be
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`familiar with Apple’s engagement with the Analysis Group. Ned S. Barnes, who submitted a
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`declaration to which Epic Games refers in their reply, SHALL also attend.
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`The parties shall each file a witness list by noon on Tuesday, April 30, 2024 with a short
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`description of the anticipated evidence and an exhibit list by Friday, May 3, 2024. Electronic
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`copies of exhibits shall be exchanged no later than noon on Saturday, May 4, 2024.
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`IT IS SO ORDERED.
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`Dated:
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`April 23, 2024
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`YVONNE GONZALEZ ROGERS
`UNITED STATES DISTRICT JUDGE
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`Northern District of California
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`United States District Court
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