The Tribunal issued its combined permission to serve out of the jurisdiction judgment in Epic Games v Apple (the Apple Claim) and Epic Games v Google (the Google Claim) on 22 February 2021, declining permission for service on Apple Inc. and granting permission for service for a subset of Epic’s claims on Alphabet Inc. and Google LLC. The judgment provides helpful guidance for post-Brexit permission to serve out applications and confirms that “damage” occasioned by anti-competitive conduct will not be narrowly construed.
Epic alleges an ongoing abuse of dominance by both Apple and Google in relation to the ejection of Epic’s popular and successful game Fortnite from Apple’s “App Store” and Google’s “Play Store” together with various contractual terms applied to Epic which restrict competition in the app store and in-app payment processing solutions markets. The claims against Apple and Google are unusual in one significant respect; Epic seeks only declaratory and injunctive relief, no damages.
Epic’s claim against Apple was filed against the US incorporated, Apple Inc. and Apple’s English subsidiary. The claim against Google was filed against the US incorporated Alphabet Inc. and Google LLC; two Irish incorporated subsidiaries; and one English incorporated subsidiary. Both claims were issued in December 2020, meaning permission to serve out of the jurisdiction was not required for the Irish Google subsidiaries but is required for Apple Inc., Alphabet Inc. and Google LLC.
In his judgment, Roth J. swiftly disposed of the requirement that there be a serious issue to be tried on the merits of the claim; finding that the declaratory elements of both claims failed this hurdle due to the Tribunal’s lack of jurisdiction but that the requirement was satisfied in the claims for injunctions. Roth J. then considered the second requirement for permission to serve out of the jurisdiction: whether there is a good arguable case that the claims against the US incorporated Defendants satisfied one of the CPR “gateways”; in this instance: paragraphs 3.1(2), 3.1(3) or 3.1(9) PD 6B.
The jurisdictional gateways
Roth J. declined to reach a concluded view on whether the gateway in para 3.1(2), acts within the jurisdiction, was satisfied in either the Apple Claim or the Google Claim. He noted that the interpretation of this provision “may not be straightforward in an age of digital transactions” and did not rule out an act initiated in the US as potentially coming within the gateway.
As to the gateway in para 3.1(3), necessary and proper party, Roth J. held that as Apple UK Limited is not a party to the principal contract whose terms are alleged to be anticompetitive by Epic, the Developer Program License Agreements (DPLA) and the injunctions sought could be ordered only against Apple Inc., there was no serious issue to be tried against Apple UK. This meant that the necessary and proper party gateway was not satisfied in respect of Apple Inc. This was not displaced, in his view, by Apple UK being part of the same economic entity as Apple Inc., Apple UK’s operations in the UK or its role in supporting app developers.
In the Google Claim, Roth J. concluded that that the necessary and proper party gateway was satisfied for a subset of the claims. Those claims included the claims based on the Developer Distribution Agreement (DDA), which is the contract entered into by a developer who wishes to distribute their apps through the Google Play Store. Roth J. held that there was a serious issue to be tried against Google Ireland Limited, because it is the counterparty to the DDA for apps distributed in the UK. In addition, he held that there was a serious issue to be tried against Google Commerce Limited because it is responsible for the distribution of apps through the Google Play Store in the UK and was allegedly involved in implementing the decision to remove Fortnite from the Play Store. Following these conclusions, Roth J. held that Alphabet Inc. and Google LLC are “at least” proper parties and “arguably also” necessary parties to the (subset of) Google claims in respect of which permission was granted.
Finally, in so far as the gateway in para 3.1(9), tort, is concerned, Roth J. noted that it was “somewhat unusual to found jurisdiction on that gateway in proceedings where no damages are claimed” but noted that where the injunctions sought to restrain tortious conduct which causes damage, it was open to Epic to seek to do so. For the Apple Claim, Roth J. held that if “indirect” damage, such as loss of market share or reputational damage or damage to goodwill, is sufficient, then Epic would have suffered “significant” damage sufficient to satisfy the jurisdictional gateway. He applied a similar logic to the Google Claim, indicating that “loss” would be construed in broad terms and that loss of custom through the higher prices Epic would have had to charge to its customers as a result of the anticompetitive conduct was sufficient.
Notwithstanding his conclusion on the tort gateway, Roth J. held that the Apple Claims failed the final test for permission, forum conveniens. He found the fact that there were already antitrust proceedings on foot in the US, together with the majority of factual witnesses being in the US to firmly tip the balance away from England being the more appropriate forum for the litigation. However, he reached the opposite conclusion on forum conveniens in the Google Claim. Roth J. concluded that the finding that there was a serious issue to be tried against the two Irish Google entities; which, in turn, resulted in Alphabet Inc. and Google LLC being proper parties to the claims under the necessary and proper party gateway made “a significant difference”. As to the exclusive jurisdiction clause, Roth J. declared that it would be for Google to apply to set aside permission to serve out based on the scope and application of that clause.
Roth’s judgment provides a useful indication of the approach likely to be adopted by the Tribunal in interpreting jurisdictional gateways and some of the key implications for future applications for permission to serve out. Although permission to serve out was denied for the Apple Claims, this is far from the end of the story for Epic’s dispute with Apple. Global companies have global exposure and Epic has filed claims against Apple and Google in respect of the same conduct in both the US and Australia, two countries with progressive attitudes towards unlocking competition in digital markets. This global dispute will be one to watch.
With thanks to legal intern Ben Evans for his assistance with this blog.