[00:00:04] Speaker 05:
Our next case for argument is Epic Games versus Google.

[00:01:16] Speaker 05:
Good morning.

[00:01:17] Speaker 03:
Good morning, and may it please the court, Jessica Ellsworth for Google.

[00:01:21] Speaker 03:
I'd like to reserve four minutes for rebuttal.

[00:01:24] Speaker 05:
So like the last argument, I expect that there will be a number of questions from the bench, and we may not fit within our typical 20-minute timeline.

[00:01:31] Speaker 05:
So don't stress about that.

[00:01:33] Speaker 05:
We'll make sure that everybody gets to address the points that the court has.

[00:01:37] Speaker 03:
Thank you, Your Honor.

[00:01:39] Speaker 03:
Everyone agrees that Google and Apple vigorously compete to sell mobile devices and their operating systems.

[00:01:48] Speaker 03:
This competition has shaped how we walk through the world, how we bank, how we shop, how we view health information, how we play games like Fortnite.

[00:02:00] Speaker 03:
Epic lost in its effort to avoid this reality when the Apple District Court found that

[00:02:08] Speaker 03:
Apple's App Store, Google's Play Store, and other Android stores were all in the same area of effective competition.

[00:02:16] Speaker 03:
They all compete for mobile gaming transactions.

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Those are the large majority of transactions in the Play Store, just as they are in the App Store.

[00:02:26] Speaker 04:
Let me ask you, because much of your briefing tries to import what happened in the Epic Apple case to this case,

[00:02:36] Speaker 04:
I understand the cases were filed on the same day.

[00:02:38] Speaker 04:
Was there any effort by either party to basically consolidate in front of a single judge under the local rules of the Northern District?

[00:02:49] Speaker 03:
Your honor, there was not.

[00:02:50] Speaker 03:
And I think there are two reasons for that.

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One is that Epic chose to seek a TRO and then a preliminary injunction solely against Apple.

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And so that case ended up on a different timeline.

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And the Google case got consolidated by the JPML with some other cases that were addressing the same conduct by Google.

[00:03:12] Speaker 04:
But that doesn't really answer why that wasn't

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You didn't know that on the day that the cases were filed in terms of filing a notice to the court, right?

[00:03:20] Speaker 03:
We didn't.

[00:03:21] Speaker 03:
And, Your Honor, the face of the complaints very clearly tries to silo these two operating systems into two different markets for two different complaints.

[00:03:34] Speaker 03:
What the Apple Court found, though, was that siloing

[00:03:37] Speaker 03:
after full litigation on the merits, that siloing was not valid.

[00:03:41] Speaker 03:
And that in fact, you can see this on page 1030, Apple's, quote, main competitor is Google.

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And then for good measure on 1036, that Google's, quote, main competitor is Apple.

[00:03:55] Speaker 04:
So what the- We're reading now from Judge Gonzalez's decision.

[00:03:57] Speaker 03:
Yes, your honor, although this court used that same language about the main competitor in its own decision.

[00:04:03] Speaker 03:
But Judge Gonzales Rogers looked at the market, the siloed version of the market, and said that that is not economic reality.

[00:04:12] Speaker 03:
That the economic substitutes for mobile gaming transactions are

[00:04:17] Speaker 03:
the app store, the play store, the Samsung Galaxy store, Amazon store, and other Android app stores.

[00:04:24] Speaker 03:
And so in round two, after that finding had already been affirmed by this court,

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Epic sought a do-over.

[00:04:33] Speaker 03:
That is exactly what issue preclusion as a doctrine is meant to protect against.

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You can't just lose an issue that's fully litigated the first time around and then pretend that didn't happen and try to get a different result against a different adversary.

[00:04:51] Speaker 03:
that the fact of this competition was necessary to the outcome in Apple I. Apple I relied on it for its rule of reason analysis.

[00:05:00] Speaker 03:
It relied on it for its monopolization analysis.

[00:05:03] Speaker 03:
It was necessary for this court's decision too, which also relied on affirming the district court's market definition, its application of that market through the rule of reason analysis, and then on the monopolization claim as well.

[00:05:18] Speaker 04:
Just because there are players

[00:05:21] Speaker 04:
in the same market or potentially sub-markets doesn't necessarily mean that the Apple case is preclusive here.

[00:05:30] Speaker 04:
And let me ask you to really explore that.

[00:05:33] Speaker 04:
Because there, ultimately, contrary to what I think Epic would have hoped, the market was digital mobile gaming transactions.

[00:05:42] Speaker 04:
Is that right?

[00:05:44] Speaker 03:
That's right, Your Honor.

[00:05:44] Speaker 04:
And here, the market defined was the Android market

[00:05:52] Speaker 04:
And then the jury actually specified the other specific markets, which the jury said they were the app distribution and the in-app billing.

[00:06:04] Speaker 04:
And so now you're saying that we should basically throw that out and import the Apple.

[00:06:11] Speaker 04:
Is that right?

[00:06:13] Speaker 03:
So, Your Honor, I want to be very clear here.

[00:06:14] Speaker 03:
Our argument was that Epic was not allowed

[00:06:17] Speaker 03:
in its second suit to seek findings that were inconsistent with the Apple I findings about competition between Apple and Google, especially for the mobile gaming transactions.

[00:06:32] Speaker 03:
And that's more than 80% of the transactions that Epic was seeking in its do-over case against Google to get a different outcome from.

[00:06:39] Speaker 01:
Let me ask this.

[00:06:41] Speaker 01:
Epic raised a claim of an aftermarket theory with regard to Apple, which it did not raise with respect to Google, and I think it has good reasons why not.

[00:06:53] Speaker 01:
It doesn't overlay completely.

[00:06:55] Speaker 01:
Is your argument that Epic was not allowed to present different theories?

[00:07:02] Speaker 01:
and different evidence with regard to Google and its own relationships with app distributors and original equipment manufacturers?

[00:07:14] Speaker 03:
The two complaints in this case start from a virtually identical position where the descriptions of the markets, one uses iOS and one uses Android, but they are the same.

[00:07:25] Speaker 03:
The words for market and after market don't appear in either complaint.

[00:07:30] Speaker 03:
And Judge Gonzalez-Rodgers quickly brushed that aside and said, we're not talking about form over substance here.

[00:07:37] Speaker 03:
In substance, these are aftermarket claims.

[00:07:39] Speaker 01:
But as to my question itself, was Google allowed to present different theories and different evidence with regard to Google than what it had presented against Apple in this trial?

[00:07:50] Speaker 01:
Or is it your view that the trial should never have taken place at all?

[00:07:54] Speaker 03:
Well, Your Honor, I think

[00:07:58] Speaker 03:
There are sort of two layers to your question.

[00:08:01] Speaker 03:
On issue preclusion, we think, and this is why before trial we raised this in a motion in Lemonay, that their trial presentation, as far as it extended to mobile gaming transactions, could not seek an inconsistent result the second time around from what the court had already held the first time around and had been affirmed on appeal.

[00:08:20] Speaker 03:
At that point in time, it was unclear whether they would argue that they could still win, even with preclusion.

[00:08:26] Speaker 03:
But the district court chose not to address this pre-trial.

[00:08:30] Speaker 03:
That's why we ended up with it in a JMOL or new trial motion.

[00:08:34] Speaker 04:
But you never moved for some reason.

[00:08:35] Speaker 04:
It just seems odd to me that

[00:08:38] Speaker 04:
If you think, I'll call it the apple suit, if you think that precludes really the remedies and the claims here, why that wasn't a summary judgment legal argument?

[00:08:51] Speaker 03:
It's a really important question, Your Honor, and I'm glad you asked, because at the time that Google filed for summary judgment,

[00:08:58] Speaker 03:
it was facing multiple suits by multiple plaintiffs.

[00:09:02] Speaker 03:
And it filed a single summary judgment motion.

[00:09:05] Speaker 03:
All of the arguments in that motion were ones that if Google had won, they would have changed the scope of the trial.

[00:09:11] Speaker 03:
Issue preclusion of one issue against one plaintiff would not have affected the scope of the trial.

[00:09:19] Speaker 03:
It also was not yet clear whether this court was going to affirm or not on the market definition that Apple I had found.

[00:09:25] Speaker 03:
So what we did,

[00:09:26] Speaker 03:
was raise it pre-trial through a motion in limine asking for a limitation on their trial presentation.

[00:09:32] Speaker 03:
The district court didn't address it that way, and that was fine.

[00:09:36] Speaker 03:
We then re-raised it after trial.

[00:09:38] Speaker 03:
There was no question about timeliness from the district court when we raised it after trial.

[00:09:43] Speaker 03:
The court's basis for its ruling was that it was not the same issue.

[00:09:47] Speaker 04:
Under the SEC versus Stein, would that be reviewed on an abuse of discretion standard?

[00:09:56] Speaker 03:
No, Your Honor, the availability of issue preclusion is something that is reviewed de novo.

[00:10:02] Speaker 03:
It is when you get into the discretionary application of the doctrine that that is what's viewed for abuse of discretion.

[00:10:08] Speaker 03:
So this is a de novo issue.

[00:10:09] Speaker 04:
The other de novo- It's de novo because you think it's dispositive?

[00:10:15] Speaker 03:
It is de novo because it is a question of whether the legal prerequisites for application of preclusion are met.

[00:10:26] Speaker 01:
But even if that's the case, why wouldn't it be an abuse of discretion standard to review whether the court has decided whether to, let's say Judge Gennaro agreed with you that the legal standards had been met for issue of preclusion, he still could have decided not to preclude and we would be reviewing that for an abuse of discretion, wouldn't we?

[00:10:45] Speaker 03:
So Your Honor, he could.

[00:10:46] Speaker 03:
Of course, that was not how the facts played out.

[00:10:50] Speaker 03:
And I think that would be a difficult finding to make in this case.

[00:10:52] Speaker 03:
The Park Lane hosiery, the Supreme Court sort of seminal case on issue preclusion, strongly suggests that the defensive use of issue preclusion is mandatory, not discretionary, or at least it is far less discretionary.

[00:11:06] Speaker 03:
And the factors that it sets out for what could guide a court's discretion, none of them would map onto the situation in this case.

[00:11:14] Speaker 03:
The other issue that I think is important and subject to de novo review is the aftermarket question that Your Honor started to raise, Judge Sanchez.

[00:11:23] Speaker 03:
An aftermarket, as this court has defined it, has one defining feature.

[00:11:28] Speaker 03:
The demand for a product is entirely derivative of some previously purchased product.

[00:11:34] Speaker 03:
That's it.

[00:11:35] Speaker 03:
That is all that is required to be in an aftermarket's case.

[00:11:39] Speaker 03:
Here, the district court

[00:11:41] Speaker 03:
really did take a form over substance or sort of a magic words approach to whether this was an after markets case by refusing to instruct the jury on the basis that they had not heard the words for market and after market.

[00:11:54] Speaker 03:
They surely understood that this entire case was built on what happened after you bought an Android phone.

[00:12:01] Speaker 03:
Epic's own opening statement

[00:12:03] Speaker 03:
You can see this at 5ER964, starts from the fact that, quote, on Android smartphones, the primary place that people go to get their apps is the Google Play Store.

[00:12:15] Speaker 03:
So we're talking about Android smartphones.

[00:12:17] Speaker 03:
In fact, there are 400 references during the trial to Android phones or Android devices.

[00:12:23] Speaker 03:
So this jury heard roughly on one out of every eight pages of trial transcript.

[00:12:28] Speaker 03:
that we were talking about what happened after you purchased an Android phone.

[00:12:32] Speaker 03:
That makes this an after markets case.

[00:12:35] Speaker 04:
Let me stop there.

[00:12:37] Speaker 04:
They define the market simply as the Android operating system.

[00:12:41] Speaker 04:
Is that right?

[00:12:44] Speaker 03:
Who is the they in your question?

[00:12:46] Speaker 04:
I'm sorry.

[00:12:46] Speaker 04:
Epic.

[00:12:47] Speaker 03:
Epic described.

[00:12:49] Speaker 03:
Nobody else here except you and Epic.

[00:12:52] Speaker 03:
At this point, everybody else is gone.

[00:12:54] Speaker 03:
Epic described, I believe, two markets.

[00:12:56] Speaker 03:
One was an app distribution market on Android phones.

[00:12:59] Speaker 03:
And the second was the in-app billing market, again, on Android phones.

[00:13:04] Speaker 03:
So everything about their markets is limited to what happens on an Android phone.

[00:13:12] Speaker 04:
So then on the Android phones themselves,

[00:13:16] Speaker 04:
Is the foremarket the multiple Android phones that are available?

[00:13:21] Speaker 03:
So Your Honor, I'm going to take us back to the Apple case for a minute, because I think one of the important things in the Apple case, when it came up on appeal, Epic argued to this court that the Apple District Court had been wrong to say that the foremarket had to be devices.

[00:13:37] Speaker 03:
And in fact, Epic argued the foremarket could be the operating system.

[00:13:41] Speaker 03:
And this court agreed that the foremarket could be the operating system.

[00:13:45] Speaker 03:
And so fast forward to this case, and we have a situation where whether it's the device or the operating system, and we know it can be either, that purchase has to happen before a consumer can be trying to consummate a transaction on that device.

[00:14:01] Speaker 01:
Can it be either?

[00:14:02] Speaker 01:
I thought Apple II, we said it was related to a durable good.

[00:14:07] Speaker 01:
And so can the aftermarket theory be based on an operating system that Google doesn't that you know that is open and I mean I see a little difference here and I thought the aftermarket the difficulty with your argument is that the aftermarket would be based on the smartphone phones themselves of which there are many manufacturers.

[00:14:28] Speaker 03:
The court did use the durable good language, but then it accepted Epic's position that the foremarket purchase could be a durable good with a particular operating system.

[00:14:38] Speaker 03:
And it didn't matter that the operating system wasn't itself available as a product.

[00:14:43] Speaker 03:
That was actually one point on which Epic prevailed in the Ninth Circuit, was this whole question about whether the operating system could be considered the appropriate foremarket competition.

[00:14:55] Speaker 04:
that we read that case the same as you, is there any other case that uses the aftermarket concept unhinged from a durable good?

[00:15:09] Speaker 04:
Well, I don't think it's unhinged from a durable good here.

[00:15:12] Speaker 04:
No, my question is not here.

[00:15:15] Speaker 04:
Is there any other case, assuming we want to follow your line of reasoning, where there is

[00:15:23] Speaker 04:
an aftermarket theory that's not predicated on durable good.

[00:15:29] Speaker 04:
I just want to read it.

[00:15:30] Speaker 04:
That's all.

[00:15:31] Speaker 03:
I think there was some discussion of a Microsoft case from the 1990s in the DC Circuit that also involved, I can't remember exactly what the operating system was, but there was a discussion in that case that I believe the Apple decision from this court refers to in its discussion of why a phone with a particular operating system can be the appropriate for market competition.

[00:15:56] Speaker 04:
Did you ever, the other thing that comes somewhat as a surprise, though I'm looking at the

[00:16:02] Speaker 04:
jury instruction that you proffered, I think it was on November 22nd.

[00:16:10] Speaker 04:
Up to that point in the trial, had there ever been argued that the jury was looking at a for market and an after market?

[00:16:22] Speaker 03:
Your Honor is correct that the words for market and after market had not been used, and that is what the district court focused on.

[00:16:29] Speaker 04:
I don't think those are magic words, but the theory

[00:16:32] Speaker 04:
Where was that argued?

[00:16:33] Speaker 04:
Just point me to that.

[00:16:34] Speaker 03:
So, Your Honor, the concept, I think, is throughout this case, starting with the opening that I read you.

[00:16:40] Speaker 03:
But Epic's own expert said to the jury that the demand for apps flows entirely from the purchase of a device.

[00:16:48] Speaker 03:
That's Mr. Bernheim's testimony at 6ER1256.

[00:16:54] Speaker 03:
Market definition was not our burden.

[00:16:57] Speaker 03:
So the reality is when we have a case that is about a for-market purchase here, an Android phone, whatever the phone is, it has an Android operating system on it, to get us into the bucket of transactions that Epic is trying to make this case about, that aftermarket framework brings with it an economic presumption

[00:17:21] Speaker 03:
that competition between Apple and Google upfront for the phone purchase is going to sufficiently discipline what happens in the aftermarket.

[00:17:31] Speaker 03:
And so the economic presumption is in place.

[00:17:33] Speaker 03:
If Epic wanted to meet and try to rebut that economic presumption, it could.

[00:17:38] Speaker 03:
That's why its claims failed in Apple.

[00:17:41] Speaker 03:
I think it's obvious why it didn't want to then have to try to make that same showing that it had just failed to make in the Apple case when this case came around.

[00:17:50] Speaker 04:
So did you object to the jury verdict form which asked what is the relevant market?

[00:17:57] Speaker 03:
I don't believe that we objected to the asking for the relevant market.

[00:18:01] Speaker 04:
And are you saying now that the jury's answer basically should be ignored?

[00:18:10] Speaker 04:
because in your view there was this instructional error.

[00:18:17] Speaker 03:
Your Honor, I think what we're saying, and I'm trying to be very precise in response to Your Honor's question, I think what we're saying is that the jury was not given the proper instructions about what the standard is to find an aftermarket.

[00:18:31] Speaker 03:
And so having not been properly instructed, that is presumed prejudicial.

[00:18:37] Speaker 03:
And in fact, I think we know it was prejudicial here, because that's the same element of an antitrust claim that is the reason

[00:18:46] Speaker 03:
Epics, proposed markets, this siloed approach failed.

[00:18:50] Speaker 03:
In the Apple case, they couldn't show what they needed to show.

[00:18:53] Speaker 03:
They couldn't rebut this economic presumption that flows from the fact you're talking about what happens after you've already bought something.

[00:19:00] Speaker 03:
After you've bought a Kodak photocopier, what happens?

[00:19:03] Speaker 03:
After you've bought an Android phone, what happens?

[00:19:06] Speaker 03:
The aftermarket issue is really one that the jury needed to know in order to properly exercise its duty here.

[00:19:17] Speaker 05:
I'm going to switch course a little bit.

[00:19:22] Speaker 05:
Thinking about both the preclusion and these issue or the aftermarket issues and the comparison to the Apple case, as I'm thinking about those issues, another thing that I'm thinking about is an overarching antitrust principle is you take every case on its facts.

[00:19:37] Speaker 05:
So we have these sort of general theory, general rules, and then we take every case on its facts.

[00:19:43] Speaker 05:
And there are definitely some clear factual differences between the Android world and the Apple world.

[00:19:49] Speaker 05:
And all of your arguments sort of brush that idea aside.

[00:19:52] Speaker 05:
And I'm trying to figure out how that works with this overarching principle of we take every case on its facts.

[00:19:59] Speaker 03:
So I completely agree with you, Your Honor.

[00:20:01] Speaker 03:
We take every case on its facts.

[00:20:02] Speaker 03:
Here, there are a number of facts that I want to highlight when you take every case on its facts.

[00:20:08] Speaker 03:
One is that 70 plus percent of the Apple App Store market is mobile gaming transactions, and 80 plus percent of Google's

[00:20:20] Speaker 03:
Play Store transactions or gaming transactions.

[00:20:22] Speaker 03:
So these cases that were filed on the same day by the same lawyers about the very same transactions and Epic has never Disputed that these cases are about the same transactions how a consumer who wants to buy Mine coins is connected with Minecraft in order to consummate that transaction these transactions are the same in both cases So it seems like I mean, I understand all of that.

[00:20:47] Speaker 05:
It seems like the district court was thinking

[00:20:49] Speaker 05:
I don't know if sub market is the right word but sort of if I look at just the Android world it works different than the Apple world right it's not the walled garden and all this stuff.

[00:20:58] Speaker 05:
And why is it wrong for the district court to sort of focus at that one step down level.

[00:21:04] Speaker 03:
But, Your Honor, all of that, I think, gets at why Epic could have made a different argument about the aftermarket prerequisites being overcome, the economic presumption being overcome, because it was talking about different consumers who had purchased a different device.

[00:21:28] Speaker 03:
What is the same in both cases is that we're talking about something that requires an earlier purchase.

[00:21:34] Speaker 03:
So those facts are really identical.

[00:21:36] Speaker 03:
You need to buy an iOS phone to be in the application.

[00:21:40] Speaker 03:
You need to buy an Android phone here.

[00:21:42] Speaker 03:
What happens after you've bought that phone?

[00:21:44] Speaker 03:
I agree that some of the allegations are different about how Apple runs its operating system, how Google and the Android operating system operate.

[00:21:53] Speaker 03:
But that goes to Epic's burden to overcome this economic

[00:21:57] Speaker 03:
presumption, not whether the presumption applies in the first place.

[00:22:01] Speaker 04:
So on your theory that the smartphone using an Android operating system is the core market, what is the aftermarket?

[00:22:10] Speaker 03:
I think it's the same aftermarket that was at play in Apple.

[00:22:13] Speaker 03:
It's these transactions that are consummated to have a consumer purchase an app or make an in-app purchase.

[00:22:25] Speaker 04:
that would include the Samsung Galaxy store?

[00:22:31] Speaker 04:
See, that's what's unclear to me from your brief.

[00:22:33] Speaker 04:
And I've spent a lot of time on both briefs trying to unpack this argument, because it wasn't really laid out at trial that I could understand.

[00:22:41] Speaker 04:
So if I take your assumption that we've got all the phones and we've got

[00:22:51] Speaker 04:
the Samsung, we've got Nokia, we've got a bunch of Chinese and other phones that operate on the Android system.

[00:23:00] Speaker 04:
What precisely then becomes the aftermarket?

[00:23:05] Speaker 04:
Because the cases that we're looking at, Uptronics and Kodak,

[00:23:09] Speaker 04:
They're kind of like a single, you know, I got one printer or two printers and then I've got my cartridges over here.

[00:23:15] Speaker 04:
This is real different.

[00:23:16] Speaker 04:
So what is the aftermarket?

[00:23:17] Speaker 04:
I just want to understand.

[00:23:18] Speaker 03:
I think the aftermarket is how you complete transactions on the device with the Android operating system.

[00:23:27] Speaker 03:
So it can be through the Play Store, the Galaxy Store.

[00:23:30] Speaker 03:
other Android stores, but the limitations, you can't go to the, you can't go to Apple's app store.

[00:23:36] Speaker 03:
There are certain limitations that come from buying an Android phone.

[00:23:42] Speaker 03:
And the district court here.

[00:23:44] Speaker 04:
Can I just stop you there?

[00:23:45] Speaker 04:
I mean that's, to me that's a little amorphous.

[00:23:47] Speaker 04:
It's whatever transactions these phones might accomplish

[00:23:52] Speaker 04:
when the focus here has been on the Play Store.

[00:23:57] Speaker 04:
So with the Samsung market being significant in the foremarket, as you call it, I'm still having trouble.

[00:24:07] Speaker 04:
You say, how do you complete transactions limitations?

[00:24:11] Speaker 04:
So I'm having trouble because this case was about

[00:24:15] Speaker 03:
the Play Store.

[00:24:17] Speaker 03:
It was but it was also about Android and I would point the court to the complaint if I could suggest you look at paragraphs 68 and 70.

[00:24:25] Speaker 04:
Let me just ask you to be precise because so far I've read all that.

[00:24:29] Speaker 04:
That's complaint language.

[00:24:31] Speaker 04:
Now we're in like trial land.

[00:24:33] Speaker 04:
What's being argued?

[00:24:34] Speaker 04:
What's the case?

[00:24:35] Speaker 04:
What's the evidence?

[00:24:38] Speaker 04:
Is there

[00:24:40] Speaker 04:
Evidence here about how Galaxy, for example, imposes what restrictions, what pricing, that sort of thing?

[00:24:51] Speaker 03:
I think there was some of that evidence at trial, but I don't think any of that has relevance to the question whether we are in an after markets case.

[00:25:00] Speaker 03:
Because the after markets nomenclature that's used turns on, and I'm quoting from this court's Apple decision,

[00:25:09] Speaker 03:
where demand for a good, here, some sort of purchase on an Android device, is entirely dependent on the prior purchase of a durable good, here, that Android device.

[00:25:23] Speaker 03:
Once we're in that world where we're talking about aftermarkets, there are four things a plaintiff has to show to overcome the economic presumption.

[00:25:31] Speaker 03:
One is that the aftermarket restrictions aren't generally shown.

[00:25:34] Speaker 04:
There's no new meaning that actually that doesn't, in and of itself, prove an antitrust violation.

[00:25:39] Speaker 03:
I think it's actually the inverse of that.

[00:25:42] Speaker 03:
That in and of itself doesn't excuse or eliminate a possible.

[00:25:46] Speaker 04:
It doesn't eliminate the possibility.

[00:25:48] Speaker 03:
Right.

[00:25:48] Speaker 03:
There are four things a plaintiff would have to show in order.

[00:25:51] Speaker 03:
I mean, this is a narrow and is purposefully narrow because this kind of approach to antitrust law where you're really cutting off from your view competition that everyone agrees is happening for the for market product in your analysis.

[00:26:09] Speaker 03:
The Supreme Court in its Kodak decision, this court in New Cal, this court in the Apple case has been clear.

[00:26:16] Speaker 03:
These are sort of a disfavored approach to antitrust cases.

[00:26:20] Speaker 01:
Well, right.

[00:26:20] Speaker 01:
And I think that's what you're maybe hearing some...

[00:26:25] Speaker 01:
wrestling with this because it is a narrow framework, but you're describing it in fuzzy and broad enough terms that it almost sounds to me as if what you're really trying to do is just define different relevant markets based on the facts before us, which is what we do, but set aside a form market after market theory.

[00:26:45] Speaker 01:
And I think the counter argument to all this is even if Google does vigorously compete with Apple, that doesn't necessarily mean that Google can create its own different ecosystem in which it acts as a monopolist through the Google Play Store.

[00:27:01] Speaker 01:
vis-a-vis other distributors and app store competitors.

[00:27:08] Speaker 01:
And so that seems to me where the trial ended up going with a different set of facts and a different definition of the relevant market.

[00:27:16] Speaker 01:
And why isn't that the more

[00:27:19] Speaker 01:
the theory with more traction than trying to shoehorn in an aftermarket theory that is not a single brand and different manufacturers and different things and I don't know.

[00:27:31] Speaker 01:
I'm a little lost with this.

[00:27:33] Speaker 03:
I just want to pause on the idea that this court could have

[00:27:38] Speaker 03:
two decisions in two cases just a couple years apart in which the very same product in one case is subject to the aftermarket's framework and the very same product, those very same transactions in another case are somehow not subject to the same governing legal framework.

[00:27:57] Speaker 04:
I think your question- The short answer to that is that the Apple operating system and the Apple universe is different.

[00:28:07] Speaker 04:
as Judge Sanchez points out, to this Android universe.

[00:28:10] Speaker 03:
It has to be different in a relevant sense.

[00:28:13] Speaker 03:
I agree there are differences, but the relevant sense is whether it requires you to buy a good before you're talking about this.

[00:28:22] Speaker 03:
And the district court was really hung up on this being some very complex framework that the jury had heard nothing about.

[00:28:32] Speaker 03:
What does get complex is how to rebut the presumption.

[00:28:35] Speaker 03:
I agree with you on that.

[00:28:37] Speaker 03:
And the district court in Apple found three reasons that EPIC didn't rebut it.

[00:28:42] Speaker 03:
This court ruled on one of them.

[00:28:43] Speaker 03:
It didn't address the other two.

[00:28:45] Speaker 03:
But either way, it didn't meet its burden there.

[00:28:48] Speaker 03:
The actual application of the economic presumption, though, flows from facts that are the same between the two cases.

[00:28:56] Speaker 03:
Your Honor.

[00:28:56] Speaker 05:
Can I test that?

[00:28:57] Speaker 05:
I just want to see if I understand this aftermarket thing by giving you a hypothetical.

[00:29:02] Speaker 05:
If I go to Home Depot and I need to buy a stove, and I have electric stoves, and I have natural gas stoves, and I purchase the natural gas stove, obviously there's competition.

[00:29:10] Speaker 05:
There's more than one company that makes that option of stove.

[00:29:15] Speaker 05:
I purchase that.

[00:29:15] Speaker 05:
And then necessarily, if my stove breaks, then I have to buy parts that work with a natural gas version.

[00:29:23] Speaker 05:
Is this theory that you're describing, would it work in that context in the same way?

[00:29:27] Speaker 03:
So Your Honor, the difference might be, and I don't know very much about the stove market, I don't know how much stoves have an operating system in the way that all of Android phones do.

[00:29:41] Speaker 03:
I mean, Android is a brand in the relevant sense.

[00:29:45] Speaker 03:
And that's what just like iOS was a brand in the relevant sense when you talk about an Android phone People know that you're talking about a phone that's running on an Android operating system.

[00:29:56] Speaker 03:
It's licensed the operating system.

[00:29:58] Speaker 05:
So That's what I'm getting at is why isn't it just a component when we talk about it's a brand Okay, I mean it has a brand name

[00:30:09] Speaker 05:
a label, but why isn't it just a component?

[00:30:12] Speaker 05:
When on, at least in the Android world, you're not necessarily dealing with the same company in the foremarket or the aftermarket.

[00:30:20] Speaker 05:
You might not be dealing with the person who created or owns Android in either of those markets.

[00:30:26] Speaker 03:
Your Honor's question, I think, is it parallels the way this court reasoned in the Kodak case that ultimately went up to the Supreme Court and the Supreme Court

[00:30:34] Speaker 03:
created this aftermarket framework in.

[00:30:37] Speaker 03:
So I think your questions are very good ones, but I do think in Kodak, the Supreme Court is the one who adopted this view that there are a very limited way in which plaintiffs can exclude some of the competition to purchase a good

[00:30:55] Speaker 03:
by focusing just on what happens after you purchase it.

[00:30:58] Speaker 03:
But it comes with these very significant strings that are attached.

[00:31:02] Speaker 03:
And that's what the problem was here.

[00:31:04] Speaker 03:
The jury didn't hear about those strings.

[00:31:06] Speaker 03:
And those strings are what led to the failure of Epic's claims in the Apple case.

[00:31:13] Speaker 04:
So basically, to me, you're defining the foremarket and the aftermarket as parallel or the same, almost.

[00:31:20] Speaker 04:
So then I would ask you, well, what about the side loading?

[00:31:25] Speaker 04:
For example, does that change?

[00:31:27] Speaker 04:
Is it really a single market brand in the aftermarket?

[00:31:34] Speaker 03:
I don't think that sideloading fits into the question about whether the aftermarket framework applies or not.

[00:31:41] Speaker 03:
Sideloading, again, might play a role in Epic trying to rebut, for example, what do customers know when they make their Android phone purchase?

[00:31:52] Speaker 03:
Are there information costs that they don't know about the life cycle of this good?

[00:31:57] Speaker 03:
Are there switching costs that come because of sideloading?

[00:32:01] Speaker 03:
Those are all arguments that were open for Epic to make in trying to meet its burden.

[00:32:06] Speaker 03:
But it didn't try to meet that burden, and it convinced the district court not to hold it to that burden by not instructing the jury on this aftermarket's instruction.

[00:32:18] Speaker 03:
I'm cognizant of time, so I might turn to the remedies, because there are a number.

[00:32:22] Speaker 05:
Before you get there, I want to ask one question.

[00:32:23] Speaker 05:
You've suggested that the district court erred by submitting EPICS claims to a jury.

[00:32:27] Speaker 05:
If we were to agree with you about that, what's the remedy?

[00:32:31] Speaker 05:
What do we do about it?

[00:32:32] Speaker 03:
So I think the remedy is that this needs to go back for a rule 52 finding a fact and conclusion of law that spells out the analysis that leads to a liability ruling.

[00:32:47] Speaker 03:
And the easiest way to understand why this is a problem is if you look at

[00:32:51] Speaker 03:
Judge Gonzalez-Roger's decision.

[00:32:53] Speaker 03:
She authored 185 pages, carefully parsing the evidence credibility.

[00:32:59] Speaker 03:
What were the anti-competitive effects arguments?

[00:33:01] Speaker 03:
What were the pro-competitive justifications?

[00:33:04] Speaker 03:
Was there a least restrictive alternative?

[00:33:06] Speaker 03:
She walked through all of that in great detail.

[00:33:09] Speaker 03:
In our case, what we have is a jury verdict.

[00:33:11] Speaker 03:
They were asked eight questions where they had to check yes or no, and they offered 14 words defining a relevant market.

[00:33:19] Speaker 03:
So in order to actually have a liability determination that is reviewable on appeal, in a case that required a bench trial because there was no consent to a jury trial, it should go back for a bench trial analysis.

[00:33:38] Speaker 04:
When it goes back- That, of course, assumes that you're correct on your jury trial issue, correct?

[00:33:43] Speaker 03:
That does.

[00:33:43] Speaker 03:
And I would note, though, Your Honor, there is no court, and Epic has not pointed to one either, that has ever forced a party into a jury trial on equitable claims over that party's objection.

[00:33:58] Speaker 03:
The only two courts that have addressed this, the 11th Circuit and the 7th Circuit, have both found that you can withdraw consent to a jury right up to the eve of trial.

[00:34:10] Speaker 03:
So there is no court.

[00:34:11] Speaker 03:
And this would really be making new law to say that a party can be, under Rule 39, forced into a jury trial

[00:34:21] Speaker 03:
When all of the circumstances have changed in their case, they have been making an objection for over a month before the trial was supposed to start about the possibility this may switch to a bench trial if the party with the jury trial right settles.

[00:34:35] Speaker 04:
You would in effect have a reversal, have no jury verdict, but keep the record and turn it into a bench trial, is that right?

[00:34:48] Speaker 03:
I think you could do that.

[00:34:50] Speaker 03:
And I'll just put two caveats on that.

[00:34:52] Speaker 03:
One is I think you need to address whether preclusion applies in that new trial.

[00:34:56] Speaker 03:
And two, I think you need to address.

[00:34:57] Speaker 04:
If we disagreed with you on preclusion, would we then just have the trial testimony?

[00:35:06] Speaker 03:
Then I think you still need to address whether the after markets is the legal governing framework so that the district court, when it approaches this,

[00:35:14] Speaker 03:
understands what the standard is by which it has to assess the evidence.

[00:35:21] Speaker 03:
And here, I think the court could do that on the existing record, because it wasn't until the charge conference that the court made the determination about whether or not to give the aftermarket's instruction.

[00:35:31] Speaker 03:
So this entire case, this trial record, was created on the understanding that the aftermarket's presumption might apply.

[00:35:39] Speaker 03:
And so I think you could use the existing record.

[00:35:41] Speaker 04:
Can I ask you a quick question, though, on your jury instructions?

[00:35:45] Speaker 04:
Were jury instructions submitted at the beginning, proposed jury instructions submitted at the beginning of the case?

[00:35:52] Speaker 03:
The proposed jury instructions were submitted at a point in time in the case when there was a party with a jury right.

[00:36:01] Speaker 04:
So OK, but that's, I'm just trying to get a sense.

[00:36:06] Speaker 04:
Usually you send in a set of proposed instructions.

[00:36:10] Speaker 04:
They obviously change over time when you get right down to it.

[00:36:12] Speaker 04:
But that was some time.

[00:36:15] Speaker 04:
And in those proposed instructions before you got to the November 22 situation, was there an aftermarket instruction proposed?

[00:36:25] Speaker 03:
Yes, Your Honor.

[00:36:26] Speaker 03:
They were included in the very first instructions that we provided to Epic in September of 2023.

[00:36:30] Speaker 03:
They were filed with the court in October of 2023.

[00:36:34] Speaker 03:
It's docket 679.

[00:36:36] Speaker 03:
That aftermarkets instruction is also in the revised proposed final instructions at docket 806.

[00:36:43] Speaker 03:
at page 50.

[00:36:44] Speaker 03:
So it is something- Thank you.

[00:36:46] Speaker 03:
I just try to understand that.

[00:36:47] Speaker 01:
Is it your view, going back to the jury trial issue, is it your view that if a party withdraws consent, that the district court must take that withdrawal at any point in time, even on the eve of trial, that there's no discretion for the court to say, no, I've planned things a different way?

[00:37:04] Speaker 03:
So the way that the 11th Circuit and the 7th Circuit approached this in the F.N.

[00:37:09] Speaker 03:
Herschel and Kramer case was to say that there is nothing in Rule 39 that imposes any time limitation on when you can withdraw and that even to the eve of trial would be appropriate.

[00:37:22] Speaker 03:
I think those courts left open a possibility that a party might argue that it was prejudiced by the late withdrawal.

[00:37:30] Speaker 03:
not by the fact that the trier of fact would be changed, but there would be some sort of prejudice that flowed from that change.

[00:37:37] Speaker 01:
But that's a different question than the one I'm, that's a different issue than the question that I pose, which is if a party decides to withdraw consent at the last minute,

[00:37:46] Speaker 01:
Does the district court have to be stuck with that withdrawal of consent?

[00:37:51] Speaker 01:
Or can the district court, because there's a countervailing understanding that the district court has broad discretion in managing their own docket and trial proceedings.

[00:38:00] Speaker 01:
If you're right, well, I just want to understand your position first.

[00:38:06] Speaker 03:
I think that in a case that involves purely equitable claims, Rule 39 limits

[00:38:15] Speaker 03:
a jury trial to situations where there is consent.

[00:38:19] Speaker 03:
And so rule 39 doesn't build in some sort of time period by which you have to withdraw consent.

[00:38:28] Speaker 03:
And here, I think it's worth noting, one, we didn't ever consent.

[00:38:31] Speaker 03:
And two, even if somehow you could read consent into this different circumstance of the whole MDL, we plainly withdrew it.

[00:38:40] Speaker 01:
And so-

[00:38:42] Speaker 01:
The corollary is people will have a right to a jury trial for damages, but they can sometimes waive that if they don't, you know, by their conduct or the timing of things.

[00:38:54] Speaker 01:
And I understand you disagree as to whether Google consented or not, but the district court did find that there was consent.

[00:39:02] Speaker 01:
Why, even if you did have some sort of a right to a bench trial, we want to call it that, why couldn't the district court have reasonably found that Google waived that right by waiting too late until the eve of trial in order to withdraw consent?

[00:39:19] Speaker 03:
I don't think any court has ever approached this through a waiver lens.

[00:39:23] Speaker 03:
I think the way the courts have talked about it is that they have looked to see if there was some sort of specific prejudice that would flow from the shift in time.

[00:39:33] Speaker 03:
And so, for example, if you try to withdraw your consent to a jury trial, mid-trial,

[00:39:38] Speaker 03:
or at the charge conference or after, essentially after the jury has already heard part of the claim and a portion of the case has been presented where someone doesn't know who the ultimate trier of fact is going to be.

[00:39:51] Speaker 03:
Courts have said that's too late.

[00:39:53] Speaker 05:
Well, it's interesting because rule 39 doesn't say anything about timing, doesn't say anything about prejudice, doesn't say anything about reasonableness.

[00:40:00] Speaker 05:
And it builds in an option for if you don't have consent, court, you can always do an advisory jury.

[00:40:05] Speaker 05:
So why isn't that the fallback if you don't have consent?

[00:40:10] Speaker 05:
And here, the district court seemed to say, I don't have consent.

[00:40:13] Speaker 05:
I'm just not accepting that.

[00:40:16] Speaker 03:
I agree, Your Honor, that that was the district court's approach.

[00:40:18] Speaker 03:
And I think if it had wanted to use an advisory jury, it probably could have, but an advisory jury doesn't excuse the court from issuing a Rule 50 to a findings of fact and conclusions of law at the end.

[00:40:33] Speaker 03:
And that's, again, where the

[00:40:34] Speaker 05:
I mean, I agree with that, procedurally.

[00:40:37] Speaker 05:
So my question then comes back to Rule 39 governs this only if it's triggered.

[00:40:42] Speaker 05:
And 39C starts out with, in an action not triable of right by a jury, the court may, one, try an issue, so action an issue, may try an issue to an advisory jury, or may try an issue to a jury on consent.

[00:40:58] Speaker 05:
So none of that is triggered unless we are in an action not triable of right by a jury.

[00:41:03] Speaker 05:
And my lingering question there is Google had counterclaims.

[00:41:07] Speaker 05:
They triggered a right to a jury at the start of this trial when the court was making this decision about does this go to the bench or does this go to the jury?

[00:41:14] Speaker 05:
Weren't those counterclaims still alive and didn't they still trigger a right to a jury?

[00:41:19] Speaker 03:
Yes, Your Honor, there was a counterclaim that was still alive at that point in time.

[00:41:25] Speaker 03:
And I think that's why in the filings that Google made in that month leading up to trial, it consistently said, if we settle with the match plaintiffs who were the other remaining plaintiffs at that point in time, we're going to have to consider what claims go to the jury and what don't.

[00:41:42] Speaker 03:
Because Google did have, as Your Honor points out, a counterclaim that was trialed to the jury

[00:41:49] Speaker 03:
Epic had its antitrust claims that were not triable to the jury.

[00:41:54] Speaker 03:
It had its UCL claim that was not triable to the jury.

[00:41:57] Speaker 03:
And it had an illegality offense to Google's counterclaim that was also not triable to a jury.

[00:42:03] Speaker 03:
So nothing that Epic wanted to present was an issue that it had a jury trial right on.

[00:42:10] Speaker 03:
And the court understood this.

[00:42:11] Speaker 03:
So I guess I'm not.

[00:42:15] Speaker 05:
I'm just trying to figure out if 39C is triggered.

[00:42:20] Speaker 05:
and trying to figure out, is this an action not triable of right by a jury?

[00:42:24] Speaker 05:
What does action mean?

[00:42:26] Speaker 05:
Is this a claim not triable to a jury, or is this a whole case that has nothing that triggers a right to a jury?

[00:42:33] Speaker 03:
So, Your Honor, it can't be the whole case perspective because there are often cases that have equitable pieces.

[00:42:40] Speaker 03:
and jury triable pieces, and some of those then get resolved by the jury, and some get resolved afterwards by the court.

[00:42:48] Speaker 03:
What Rule 39C is looking at is that the claims and issues that get presented to a jury, when there is no right to a jury on those claims and issues, that can only happen when you have consent, which we didn't have here.

[00:43:04] Speaker 03:
And I think the district court understood this, to make just one last point on this.

[00:43:08] Speaker 03:
And I'm quoting the court.

[00:43:09] Speaker 03:
This is from October 12.

[00:43:11] Speaker 03:
So this is weeks before the November 6 trial date.

[00:43:15] Speaker 03:
The court understands Google's argument and says, if it's equitable, you don't want a jury.

[00:43:19] Speaker 03:
That's the issue.

[00:43:20] Speaker 03:
It's going to be a jury trial unless and until a settlement with someone is reached.

[00:43:24] Speaker 03:
And then we can talk about the potential ramifications.

[00:43:27] Speaker 03:
So the judge knew, weeks ahead of time, that there was a possibility

[00:43:31] Speaker 03:
that the match plaintiffs were going to settle, and there would be potential ramifications he was going to have to address when this case went to trial, if it still went to trial on November 6th, if he granted a continuance.

[00:43:44] Speaker 03:
The match plaintiffs settling out meant that Epic was now presenting the case on its own entirely, so the dynamics were really in flux.

[00:43:52] Speaker 03:
But what was not in flux was that Google did not consent to having Epic's claims tried to a jury.

[00:44:00] Speaker 03:
If I can turn to the remedies, because I think that the injunction entered in this case really

[00:44:08] Speaker 03:
contradicts several first principles of antitrust law in very troubling ways.

[00:44:15] Speaker 03:
The court brushed away the entire Trinko line of cases as having no application in the remedies phase when the fundamental principle underlying those cases is that there is no duty to deal in antitrust law precisely because courts can't and aren't in the business of enforcing dealings between competitors.

[00:44:36] Speaker 03:
The district court failed entirely to conduct the causal analysis that's required when remedies extend beyond the challenged conduct.

[00:44:45] Speaker 03:
This is essentially the same error that the Microsoft court made in the first go round of the, that the DC circuit corrected up on appeal in both optronic, which is this court's decision, and in

[00:44:59] Speaker 03:
the Microsoft DC Circuit decision, the courts have made clear that you have to have a causal connection before you can go beyond the challenged conduct.

[00:45:09] Speaker 03:
The district court also ignored that Google and 53 attorneys general had entered into a settlement agreement where they had agreed to make quite significant changes to the same contractual provisions that Epic was challenging in this case.

[00:45:26] Speaker 03:
And the district court imposed this unprecedented technical committee to decide how Google would build and implement these new services that it was requiring Google to build, develop, and then offer to competitors.

[00:45:43] Speaker 03:
All of these conflict with

[00:45:46] Speaker 03:
really establish sort of first principles of antitrust laws and our reasons that the injunction, setting aside the problems with the liability verdict, that the injunction is very problematic.

[00:45:58] Speaker 03:
This court has said in the Aerotech case that courts are really ill-equipped to require duties to deal and that that is the core reason for Trinko's liability.

[00:46:12] Speaker 03:
In the Metro Net Services case, this court said that courts can't be in the business of ordering sharing when, quote, the defendant doesn't already provide the product.

[00:46:23] Speaker 04:
None of the forced sharing.

[00:46:26] Speaker 04:
All of that really boils down to what the product is.

[00:46:29] Speaker 04:
So as I understand, Epic's argument is basically you have all these apps that are out there.

[00:46:39] Speaker 04:
The data is out there, the data is in the system, and their experts said, well, take less than a million dollars to install the appropriate features for this.

[00:46:55] Speaker 04:
So what is, you know, I guess that, you say it's a new product, they say it's a variation on what we have.

[00:47:03] Speaker 03:
At a minimum, Your Honor, it is new services that require new infrastructure.

[00:47:08] Speaker 03:
It requires new terms of dealing.

[00:47:11] Speaker 03:
It requires new policies.

[00:47:13] Speaker 03:
It requires Google to create an interoperability with other app stores.

[00:47:18] Speaker 03:
It requires Google to create a mechanism for vetting other app stores so that they can be distributed through Play, which is something that Play has never before done.

[00:47:28] Speaker 03:
It is set up to distribute apps, not stores.

[00:47:31] Speaker 03:
And I think the district court rejected the kind of cavalier approach that EPIC proposed in its injunction.

[00:47:39] Speaker 03:
And you can tell that because although it didn't give us the duration of time that we asked for, it did say that these remedies, these force sharing remedies, it said they would take at least eight months to implement it.

[00:47:51] Speaker 03:
And it put a technical committee in place because there were going to be hundreds if not thousands of design choices, product design choices,

[00:47:59] Speaker 03:
that need to be made, business model choices that need to be made.

[00:48:02] Speaker 03:
And I think that the technical committee is extremely troubling in its own right.

[00:48:07] Speaker 03:
But what it does underscore is that the court was really forcing Google to do something new that Google had not done before.

[00:48:15] Speaker 03:
And that is a line that no court, to our knowledge, has ever endorsed as an antitrust remedy.

[00:48:24] Speaker 04:
I'm looking at the state remedies.

[00:48:26] Speaker 04:
And it would seem to me that a number of them really parallel

[00:48:31] Speaker 04:
inept distribution.

[00:48:33] Speaker 04:
Would you agree with that?

[00:48:35] Speaker 03:
Some of the state remedies I think there are parallels in.

[00:48:38] Speaker 03:
There's some nuance and differences.

[00:48:41] Speaker 03:
Some of them are quite different.

[00:48:43] Speaker 03:
So for example, the state remedies, which were negotiated by the 53 attorneys general on behalf of consumers, the state remedies include what's called user choice billing.

[00:48:55] Speaker 03:
That's where a user gets to decide to pay for a transaction either

[00:49:00] Speaker 03:
through the Google billing service, Google Play billing, or through something else if a developer is offering something else.

[00:49:09] Speaker 03:
What the injunction the court imposed does, and notably it's an injunction in a case brought by a developer, is the court orders developer choice billing.

[00:49:18] Speaker 03:
And developer choice billing takes that choice away from the consumer.

[00:49:22] Speaker 03:
and just allows the developer to decide that there may be only one option to pay for something.

[00:49:27] Speaker 03:
So there are some very significant differences.

[00:49:30] Speaker 03:
This is exactly why a fulsome remedies proceeding was necessary to kind of air all of this and determine, first of all, what is the problem we're trying to remedy.

[00:49:43] Speaker 04:
Well, that was what I was going to ask in terms of the network effects.

[00:49:49] Speaker 04:
The theory, as I understand it, is that by offering the catalog to everybody, that now everybody is on a level playing field.

[00:50:01] Speaker 04:
And your objection is, yeah, but to put them there requires more than de minimis changes, et cetera.

[00:50:10] Speaker 04:
Let's assume that that catalog remedy were sustained.

[00:50:16] Speaker 04:
What about the period?

[00:50:18] Speaker 04:
What about the time frame?

[00:50:19] Speaker 04:
What did you argue about that?

[00:50:22] Speaker 03:
Your Honor, the parties had different views about the time frame.

[00:50:25] Speaker 03:
I don't think that the time frame plays a tremendous role in the issues that are teed up for this court.

[00:50:31] Speaker 03:
The much bigger issue is that this catalog sharing remedy

[00:50:37] Speaker 03:
And Epic was very clear.

[00:50:39] Speaker 03:
The district court never held any briefing on why a remedy was appropriate, the legal basis for a remedy.

[00:50:46] Speaker 03:
It just jumped right in to, let's start with a proposed remedy and go from there.

[00:50:50] Speaker 03:
And what Epic said was, let's turn this two-sided market into a one-sided market.

[00:50:54] Speaker 03:
We'll do that by giving the play catalog to everyone.

[00:50:58] Speaker 03:
That will just restructure the market in this really critical way.

[00:51:02] Speaker 03:
But what's really important to understand is that Google Play's catalog is something that was built up through

[00:51:10] Speaker 03:
at this point, 15, 16 years of work, much of which predates any of the challenged conduct in this case.

[00:51:19] Speaker 03:
And I'm going to borrow from the Microsoft II decision now in saying a district court's job when it's looking at removing the fruits of a violation has to first identify what those fruits are before you can start taking them away.

[00:51:35] Speaker 03:
So this is the causal linkage that the district court just skipped right over by jumping straight into let's start with a proposed remedy rather than figure out what is it that we're trying to remedy.

[00:51:49] Speaker 03:
So let me just understand.

[00:51:50] Speaker 04:
If I create a new app, Cows Have Fun, then not only

[00:52:00] Speaker 04:
Do I get the entire and I have an app store that goes with it, although hardly anyone will come to my app store.

[00:52:06] Speaker 04:
It's much easier to go to Google play or maybe marginally Amazon, but I will now have access to the entire catalog that I can put on my app store.

[00:52:16] Speaker 04:
Is that right?

[00:52:17] Speaker 03:
That is exactly what this remedy provides.

[00:52:20] Speaker 03:
That is exactly what this remedy provides.

[00:52:22] Speaker 03:
And one of the things Google asked the district court to do was at least put in place eligibility criteria for what would constitute an actual viable app store, make sure it has policies, make sure it has ways for customers to get service, make sure it has ways for developers to

[00:52:39] Speaker 03:
expressed their disagreement with being in that store and the district court just brushed that all away as well and declined to give any consideration to those sort of very disputed issues about what these remedies were really trying to do and what their scope should be.

[00:52:56] Speaker 01:
Let me take up your argument about a court not being able to order dealing with an opponent.

[00:53:03] Speaker 01:
I think the argument on the other side has been that you're over-reading Trinko because that was about liability and not about remedies.

[00:53:13] Speaker 01:
that once someone has been found to have committed antitrust violations, the portfolio that the district court has for remedies is broad.

[00:53:23] Speaker 01:
And I take the point, there was a claim for unlawful risk of trade, which would mean take down these unlawful agreements.

[00:53:34] Speaker 01:
But there was also the monopolization claim.

[00:53:37] Speaker 01:
that was also found by the jury and the court then has to try to remedy that.

[00:53:44] Speaker 01:
And so in that sense, why isn't there discretion for the court to have dealing with other rivals?

[00:53:54] Speaker 01:
I remember in electronics that in that case, one of the remedies was ordering these telescope manufacturers to deal with the plaintiffs.

[00:54:02] Speaker 01:
So I do think there are examples of being able to deal with opponents, aren't there?

[00:54:07] Speaker 03:
There are.

[00:54:08] Speaker 03:
What makes those examples different from this case is that that is where a defendant is ordered to share with a rival something that it is already sharing with others.

[00:54:22] Speaker 03:
So for example, in the Ford case, there was a requirement to make purchases of spark plugs.

[00:54:29] Speaker 03:
Spark plugs already existed.

[00:54:31] Speaker 03:
It was just a question of who was going to be buying and selling these spark plugs.

[00:54:34] Speaker 03:
In the Optronics case, same thing with the telescopes.

[00:54:37] Speaker 03:
who are you going to be buying and selling telescopes from?

[00:54:39] Speaker 03:
What's different here is that this is actually requiring new services that don't currently exist.

[00:54:46] Speaker 03:
So I think that in and of itself distinguishes those old cases.

[00:54:49] Speaker 01:
But I guess what I would say, you know, Ford Motor required an entire divestment of a whole plant or asset.

[00:54:56] Speaker 01:
That was a big remedy.

[00:54:58] Speaker 01:
And here there's

[00:55:01] Speaker 01:
availability of those, I just wonder, I mean, you're right, it's new and it's different, but that doesn't mean that it can't be rectified.

[00:55:10] Speaker 01:
And I'm not hearing that that's the case, right?

[00:55:13] Speaker 01:
So it's the access to the Google Play Store would require, and I'm not technological in this sense, greater access for others to have it.

[00:55:22] Speaker 01:
And so that infrastructure is new, but why is it beyond the bounds of what courts have remedied in the past?

[00:55:28] Speaker 03:
So I think there are two reasons.

[00:55:29] Speaker 03:
And just to flag that Ford was a merger case and divestiture in a merger case is a very different question about than a monopolization case like this one.

[00:55:40] Speaker 03:
But Optronic, I think, gives us that dividing line.

[00:55:43] Speaker 03:
And actually, Optronic and Microsoft, they refer back to some of the same cases that the district court, in theory, recited about prying open the market and opening competition.

[00:55:56] Speaker 03:
But what the district court did was stop at the pry open the market and focus on what can I do to pry open the market.

[00:56:02] Speaker 03:
But what those cases all say is you pry open the market

[00:56:05] Speaker 03:
to the extent it was closed by the violation.

[00:56:09] Speaker 03:
And that, to the extent it was closed by the violation part, is extremely important.

[00:56:14] Speaker 03:
That is the cabining principle in when you can go beyond the conduct you're talking about, Your Honor, the specific unlawful restraints.

[00:56:23] Speaker 03:
And so in order to make that analysis, and network effects is what the district court focused on,

[00:56:28] Speaker 03:
The court would have had to determine, first of all, what conduct that Google did violated the antitrust laws and had an effect on the network effects.

[00:56:39] Speaker 03:
What was that effect?

[00:56:41] Speaker 03:
When did it occur?

[00:56:42] Speaker 03:
Some of this conduct that was challenged was in 2019 and 2020, right as the case was being filed.

[00:56:52] Speaker 03:
impulse to say it clearly contributed to network effects doesn't work because it simply wasn't in place for long enough for it to be a no-brainer that there was a network effect.

[00:57:04] Speaker 01:
But there was evidence presented to the jury about the unlawful agreements with the tiering system, the hug

[00:57:13] Speaker 01:
contract, other things that insulated the Google Play Store from other App Store competitors, with the OEM agreements, having just Google Play be on their devices and not anyone else.

[00:57:28] Speaker 01:
And I don't know if it's in the briefing or in the discourse order, but that the combination

[00:57:33] Speaker 01:
those effects entrenched and expanded Google's monopolistic behavior.

[00:57:40] Speaker 01:
What more does one need for findings in order to justify the prying open end of the remedy than that?

[00:57:49] Speaker 03:
So Your Honor, I would point you to the jury verdict.

[00:57:52] Speaker 03:
I think you should look at the jury verdict.

[00:57:53] Speaker 03:
And you should see if you see anything in those eight questions the jury answered yes or no to that says anything about entrenching anything, enhancing anything, contributing to network effects, you're not going to find it.

[00:58:07] Speaker 06:
No.

[00:58:07] Speaker 04:
But the jury found the liability.

[00:58:09] Speaker 04:
Right.

[00:58:10] Speaker 04:
They were not asked, OK, now what do we do about it?

[00:58:13] Speaker 04:
So that seems like a little bit of an unfair extension of the jury's role.

[00:58:19] Speaker 04:
You're saying the judge should have done that.

[00:58:21] Speaker 03:
Your Honor, I could not agree with you more.

[00:58:23] Speaker 03:
That is exactly what has to happen.

[00:58:25] Speaker 03:
It is black letter law that when a jury verdict doesn't give you the facts necessary to enter an injunction or determine whether an injunction is appropriate, the court has to make those findings.

[00:58:37] Speaker 03:
That's the US wholesale case from this court.

[00:58:40] Speaker 03:
It's the McCarthy case from the Second Circuit.

[00:58:43] Speaker 03:
The district court here treated the jury verdict as you would sufficiency of the evidence challenge, where every disputed fact the jury must have held against Google on.

[00:58:53] Speaker 03:
That is not what courts do when they enter injunctions.

[00:58:57] Speaker 03:
In crafting an injunction, a court can only look to the jury verdict to the extent a fact is necessarily, and that's the quote, necessarily found in the verdict.

[00:59:07] Speaker 03:
So all of these questions about whether there was an enhancement or an entrenchment, that's what the remedies proceeding should have played out.

[00:59:15] Speaker 03:
In the Microsoft case, when it went back on remand, just to give an example of how this works, the court held 32 days of trial testimony to hear from witnesses to really understand what the impact was of the conduct that had been found to violate the antitrust laws.

[00:59:33] Speaker 05:
All right, Council, I'm going to jump in here.

[00:59:35] Speaker 05:
We've let you go almost an hour.

[00:59:36] Speaker 05:
Do my colleagues have any questions that you need right now?

[00:59:39] Speaker 04:
Just one last question, and that's on this app distribution remedy.

[00:59:43] Speaker 04:
Really, two questions.

[00:59:44] Speaker 04:
Basically, my Cows Have Fun app is required now to be on Google Play, or be permitted to be on Google Play, right, under the app distribution remedy, or no?

[00:59:55] Speaker 03:
I don't think the app distribution remedy requires Google to put apps in the store unless they otherwise meet Google's requirements.

[01:00:03] Speaker 04:
But then those are figured out in terms of security and all of that.

[01:00:07] Speaker 04:
You objected to that Google can't really go beyond reasonable costs.

[01:00:16] Speaker 04:
It should be nondiscriminatory.

[01:00:18] Speaker 04:
But an argument could be made, well, if you have nondiscriminatory,

[01:00:22] Speaker 04:
You just gouge everybody.

[01:00:24] Speaker 04:
So what is the response to that?

[01:00:27] Speaker 03:
Your Honor, the response to that, I think, is that this Court has already said that an effort to impose a reasonable cost limitation on a party as an antitrust remedy is inappropriate.

[01:00:38] Speaker 03:
and to the extent that there are issues that come up, it really does underscore exactly why these remedies are so troubling, because we are now putting courts in a position of ordering terms of service, setting prices, making product design choices, all the things that courts in the whole Trinko line of cases recognize they are very ill-equipped to do, and the technical committee here does not solve any of that.

[01:01:06] Speaker 03:
With that, I'll save the remainder of my already expired time for rebuttal.

[01:01:11] Speaker 05:
Thank you, Your Honor.

[01:01:24] Speaker 05:
All right, I want to understand, we've got some sharing of time.

[01:01:27] Speaker 05:
Obviously, I'm not going to hold you to the strict time limits, because we haven't been doing that in this case.

[01:01:32] Speaker 05:
But EPIC is going first, and then the United States, that's the plan?

[01:01:36] Speaker 00:
That's correct, Your Honor.

[01:01:37] Speaker 05:
All right.

[01:01:38] Speaker 00:
So if I may, Your Honors, please, the Court, Gary Bornstein for Epic Games.

[01:01:43] Speaker 00:
And if I may, I'd like to move back to liability, unless the Court would like to stay on remedy.

[01:01:48] Speaker 00:
And hopefully, we'll get to both over the course of the argument.

[01:01:51] Speaker 00:
I'd like to start with the single brand market issue.

[01:01:54] Speaker 00:
I think part of the reason we're having so much trouble on this today is because it wasn't presented to the jury below.

[01:02:02] Speaker 00:
I heard more about the single brand market theory that Google has here in this courtroom than the jury or the district court ever heard.

[01:02:10] Speaker 00:
There needs to be an evidentiary foundation that's presented to the jury before it's appropriate to give an instruction on that particular theory.

[01:02:21] Speaker 00:
And I would direct the court

[01:02:23] Speaker 00:
to the Skidmore decision.

[01:02:24] Speaker 00:
It's an en banc decision of this court.

[01:02:27] Speaker 00:
And it's very clear that a plaintiff or a defendant is not entitled to an instruction based on a legal theory that was not presented to the jury.

[01:02:36] Speaker 00:
And as the district court said, the idea of an aftermarket was a complete ghost.

[01:02:41] Speaker 00:
in the trial in this case.

[01:02:43] Speaker 00:
It's not a question of magic words.

[01:02:45] Speaker 00:
That's true.

[01:02:46] Speaker 00:
But the concept was never presented.

[01:02:49] Speaker 00:
It was something that was not presented by any of the experts through discovery or at trial.

[01:02:55] Speaker 00:
No expert was cross-examined about the subject.

[01:02:59] Speaker 00:
It literally never came up.

[01:03:01] Speaker 00:
It would have confused the jury to no end to suddenly be sent back into the jury room and presented with an issue that it had never heard about once in what was already a relatively complicated trial.

[01:03:14] Speaker 00:
So we think that is dispositive to the question of the single brand market theory.

[01:03:20] Speaker 04:
Were the court- That's not dispositive.

[01:03:23] Speaker 00:
Well, if that's not dispositive, Your Honor, were the court to go past that, it does fail on the merits as well.

[01:03:29] Speaker 00:
The district court was right to reject it on that ground as well.

[01:03:34] Speaker 00:
I think the analogy that Judge Forrest used during the first part of the argument was an apt one.

[01:03:40] Speaker 00:
that Android is a component.

[01:03:44] Speaker 00:
It's something that is licensed to the makers of the brands.

[01:03:48] Speaker 00:
It's like Windows is licensed to Dell and Lenovo and Acer and other laptop makers.

[01:03:55] Speaker 00:
We would never call that a single brand.

[01:03:58] Speaker 00:
Samsung

[01:04:01] Speaker 00:
Motorola, the Chinese brands that Judge McKeown referred to like Xiaomi, they all compete with one another.

[01:04:07] Speaker 00:
That's what consumers purchase.

[01:04:09] Speaker 00:
They purchase a device.

[01:04:10] Speaker 00:
In fact, as quoted just a little bit ago, that was the testimony from

[01:04:18] Speaker 00:
the experts at trial, that Android flows from the purchase, quote, of a device.

[01:04:26] Speaker 00:
Council just read it to the court this morning.

[01:04:28] Speaker 00:
That's from page 1256 of the record.

[01:04:31] Speaker 00:
Google, with the small exception of the Pixel device, Google doesn't sell devices.

[01:04:36] Speaker 00:
Google doesn't transact with the users before they purchase the durable good that you need to have for a single-brand market.

[01:04:45] Speaker 00:
Google transacts with the original equipment manufacturers, the OEMs, like Samsung, and it transacts with them through a license agreement

[01:04:57] Speaker 00:
that consumers have no visibility into and never engage with.

[01:05:03] Speaker 00:
But the reason that it's not a single brand market from the perspective of the user is the aftermarket, as Google has defined it here, is not confined to a single brand.

[01:05:18] Speaker 00:
It happens across Samsung devices, it happens across

[01:05:21] Speaker 00:
Motorola devices, it happens all across the landscape.

[01:05:26] Speaker 00:
And every single case, every single one cited in our brief, every single one from this court, and every single one on page 41 of Google's brief, where the single brand aftermarket framework was applied,

[01:05:40] Speaker 00:
was a case in which the defendant was the sole seller of the good on which the aftermarket then supposedly functioned.

[01:05:49] Speaker 00:
So for example, the stove that Judge Forrest mentioned, the seller of the stove, a single particular brand of stove, Kenmore, would be the product in the foremarket, and the aftermarket would be the servicing of Kenmore stoves.

[01:06:06] Speaker 00:
So in Kodak, it was the servicing of Kodak copiers, and this court's decision in New Cal, it was the servicing of ICON copiers, and so on and so on.

[01:06:15] Speaker 04:
Well, there seems to be some ambiguity, at least as I read the briefing, that either the foremarket is the smartphone market that has Android, or Android itself stands out there as a definable foremarket.

[01:06:33] Speaker 00:
So I agree, Your Honor, there is ambiguity on that point, as I say, because it was never developed below.

[01:06:38] Speaker 00:
And I would point out that the reading of the Epic v. Apple decision that we heard this morning suggesting that that

[01:06:49] Speaker 00:
This court, in that decision, reached a conclusion, one way or the other, that the operating system was the proper foremarket.

[01:06:57] Speaker 00:
That's incorrect.

[01:06:58] Speaker 00:
I would direct the court to pages 978 and 79 of this court's decision in Epic v. Apple.

[01:07:07] Speaker 00:
That's the portion of the opinion where the court addressed Judge Gonzalez-Roger's finding, which the court found to be erroneous.

[01:07:17] Speaker 00:
The finding that you couldn't have a market where something, where the item in the market was not sold or licensed for money.

[01:07:30] Speaker 00:
The court said that's not right.

[01:07:31] Speaker 00:
We do have markets like that.

[01:07:33] Speaker 00:
Microsoft was an example.

[01:07:34] Speaker 00:
But the court does not take a position in those three paragraphs on those pages on what the proper form market was.

[01:07:43] Speaker 00:
It didn't need to do that.

[01:07:44] Speaker 04:
And so there's no... Well, I thought there was a determination that Epic hadn't met its burden in any of it.

[01:07:51] Speaker 00:
That's exactly right, and that's why the court didn't need to make a determination.

[01:07:55] Speaker 00:
The court found Epic hadn't actually satisfied its burden, and that was dispositive as far as that decision went.

[01:08:03] Speaker 01:
Well, I understand Apple's point to be that you have this prior trial, and the relevant market there was the competition between Google and Apple over the mobile game app distribution.

[01:08:17] Speaker 01:
And you have both theories, essentially you're arguing for there's ecosystems, there's the Apple ecosystem and then there's the Google ecosystem, the Android ecosystem.

[01:08:29] Speaker 01:
Is there a risk of inconsistency between the trials with having different outcomes like this?

[01:08:36] Speaker 00:
That seems to be the concern that's been raised.

[01:08:38] Speaker 00:
So the answer is no for a few reasons, Your Honor.

[01:08:42] Speaker 00:
The first one is for there to be preclusion, which is really the context in which this issue is being presented to the court.

[01:08:51] Speaker 00:
There needs to be an actual inconsistency so that the two results can't both be correct at the same time.

[01:09:01] Speaker 00:
That's not true here.

[01:09:03] Speaker 00:
you can have overlapping markets, even if one accepts, just hypothetically for a moment, that the finding in Epic v. Apple about the nature of the market were taken carved in stone.

[01:09:20] Speaker 00:
That would not preclude, because it would not be inconsistent with, the existence of the markets found by the jury here.

[01:09:28] Speaker 00:
Let me explain why that is.

[01:09:30] Speaker 00:
When you define a market, and the reason that we really don't have the same issue presented here, you start, as this court has said, in Epic Be Apple, for example, in Optronic, you start with a narrow set of products, the ones that are at issue in the complaint, and you slowly

[01:09:48] Speaker 00:
look for substitutes a little further and further out from the center to see which are the products that consumers can turn to in order to defeat an exercise of market power, you stop when you get to a place where a hypothetical monopolist can harm consumers by engaging in some conduct.

[01:10:07] Speaker 00:
That's a market.

[01:10:08] Speaker 00:
So here you start with Google Play.

[01:10:11] Speaker 00:
The closest substitutes are the other distribution outlets, the other stores or sideloading that are available on Android.

[01:10:20] Speaker 00:
And if a hypothetical monopolist or in this case an actual monopolist is able to exercise market power in a way that harms the consumers and the developers that use those products, you stop because you found a place where consumers can be harmed.

[01:10:35] Speaker 00:
If you keep going, if you broaden it and you bring in Apple, you're going to miss

[01:10:41] Speaker 00:
the ways in which Google can cause harm to users and developers, as Judge Forrest said, one level down in the Android world.

[01:10:51] Speaker 00:
And you don't want to do that because then you are missing competition injuries that the antitrust laws are intended to protect against.

[01:11:00] Speaker 00:
And that's why you see in lots of antitrust cases

[01:11:04] Speaker 00:
defendants arguing for broader markets, plaintiffs arguing for narrower markets.

[01:11:10] Speaker 00:
It's because if you make the market broad enough, as Google would like to do, you miss some of the harm to competition that occurs in the properly defined narrower market using the methodology spelled out on page 975 of the Epic v. Apple opinion about moving out iteratively from the narrow products that are at the center.

[01:11:30] Speaker 00:
And it makes sense in this case to do it that way.

[01:11:34] Speaker 00:
Because unlike in Apple, where Apple itself owns the entire vertical, soup to nuts, the hardware, the operating system, the store, Apple has an incentive to do everything it can to maximize how well Apple does, to maximize Apple's profits.

[01:11:54] Speaker 00:
Google's incentives are entirely different.

[01:11:58] Speaker 00:
Because Google doesn't own the whole ecosystem, the whole vertical.

[01:12:02] Speaker 00:
Google's incentives, like every company's, are to maximize Google's profits.

[01:12:07] Speaker 00:
And Google does so, as the experts explained to trial and as the jury found, by impairing other Android participants.

[01:12:17] Speaker 00:
That has the effect of degrading Android.

[01:12:20] Speaker 00:
It makes the pie smaller.

[01:12:22] Speaker 00:
But it does make Google slice bigger.

[01:12:24] Speaker 00:
So it's entirely within Google's interest to do that, because Google is amplifying its own profits, even though others are suffering.

[01:12:33] Speaker 00:
And so focusing on Android

[01:12:37] Speaker 00:
as the district court and ultimately the jury properly did, allows you to see the ways in which Google is harming competition as a whole, even though it's benefiting itself.

[01:12:49] Speaker 00:
And the premise of the antitrust laws, after all, is that competition makes things better.

[01:12:53] Speaker 00:
That's kind of the policy rationale behind the Sherman Act.

[01:12:58] Speaker 00:
And so if you accept that rationale, which I think we have to as a congressional policy determination,

[01:13:04] Speaker 00:
allowing competition to flourish on Android will make Android better.

[01:13:10] Speaker 00:
And so I come back after a while to Judge Sanchez's question again.

[01:13:13] Speaker 00:
By making Android better, by allowing that competition to flourish, you're actually improving its position against Apple.

[01:13:23] Speaker 00:
Google's theory

[01:13:25] Speaker 00:
has always been that Android would be harmed if it can't continue to engage in this anti-competitive conduct, if it can't continue to coerce exclusive deals from OEMs, if it can't pay $360 million to a developer not to open a store, if it can't require OEMs to make Google Play the most prominent and preferred placement store on the device.

[01:13:50] Speaker 00:
Google says all of that would be bad for Android.

[01:13:52] Speaker 00:
No.

[01:13:52] Speaker 00:
All of that would be bad for Google.

[01:13:54] Speaker 00:
We do accept that.

[01:13:55] Speaker 00:
Monopolists shouldn't engage in unlawful monopolization.

[01:14:00] Speaker 00:
But it would be good for Android to remove those restrictions and allow Android to perform better, and more importantly, allow consumers and developers who use the Android platform to get more out of it, because the competition that Google is suppressing would no longer be an issue.

[01:14:20] Speaker 04:
Well, on your after-brand market, it seems to me by in effect defining the app distribution and the in-billing as Android, haven't you defined a single market?

[01:14:35] Speaker 04:
You start out and say, well, there's really no single brand in the hypothetical aftermarket.

[01:14:44] Speaker 04:
But isn't Android the brand?

[01:14:47] Speaker 00:
But no, Your Honor, as I think Judge Forrest apt analogy makes clear, Android is one input into the devices that are the brand.

[01:14:58] Speaker 00:
I mean, Google says in its brief on page 45, it's a device for market that they are arguing for.

[01:15:04] Speaker 00:
A little different from what we heard today, but that's what's in the brief.

[01:15:08] Speaker 00:
Not something we heard at trial one way or the other.

[01:15:11] Speaker 00:
Android is one piece.

[01:15:13] Speaker 00:
that goes into that device along with a camera and a touch screen and all the other things that OEMs have to pull together to make their product.

[01:15:23] Speaker 00:
So no, the thinking about Android as the single brand is inconsistent with the way consumers

[01:15:32] Speaker 00:
Purchase the product where they actually purchase from Samsung or they purchase from one of the other OEMs and it's inconsistent with the logic behind the single-brand aftermarket theory so to talk about the logic that's spelled out in cases like Kodak

[01:15:50] Speaker 00:
The reason that single brand after markets are uncommon in the antitrust cases is that ordinarily one presumes that when you transact, when a consumer transacts with a particular seller, the consumer knows what restrictions it's getting itself into.

[01:16:13] Speaker 00:
You know what kind of hot water you're getting into if you buy a particular product.

[01:16:18] Speaker 00:
And that makes sense, and that's why Apple came out the way that it did.

[01:16:24] Speaker 00:
I'll reserve on whether it makes sense or not, but that was the decision of the court.

[01:16:28] Speaker 00:
In Apple, that was the decision in Kodak about dealing with it that way.

[01:16:32] Speaker 00:
That was the decision in New Cal, and again, all the other cases that are cited.

[01:16:39] Speaker 00:
There's no reason to apply the same presumption because the consumer is not purchasing quote unquote from Android.

[01:16:48] Speaker 00:
A consumer is transacting with each of the different OEMs to buy one of these, to buy a product.

[01:16:55] Speaker 00:
a durable good.

[01:16:57] Speaker 00:
And that's what you do need in order to fit yourself within this single brand aftermarket framework.

[01:17:04] Speaker 00:
So the district court was, aside from the waiver issue and the lack of an evidentiary foundation, which we think is dispositive, but aside from that, the district court was quite right not to apply that theory here, given the different structure of the Android market.

[01:17:20] Speaker 00:
And by the way, it happens to be the case

[01:17:24] Speaker 00:
Each of the OEMs has a somewhat different relationship with Google.

[01:17:30] Speaker 00:
Google's agreements with these OEMs are not one size fits all in every single respect.

[01:17:35] Speaker 00:
Samsung is a pretty big player in the market and it has a little more muscle to fight back against Google and get slightly different terms.

[01:17:43] Speaker 00:
And there's no way that consumers know all that when they buy a Samsung device.

[01:17:49] Speaker 00:
There's no way that consumers know what the different iterations of a license agreement are.

[01:17:55] Speaker 00:
So there's no reason to apply that presumption of knowledge, which is the foundation of the single-brand aftermarket theory.

[01:18:04] Speaker 05:
Would you turn to the trial issue in terms of whether this should have been to the court or to the jury after the settlement of all the other damages plaintiffs?

[01:18:12] Speaker 00:
Yes, of course, Your Honor.

[01:18:13] Speaker 00:
So we think that the district court was well within its discretion, and it is a discretionary determination in our view.

[01:18:21] Speaker 05:
What's the authority for that?

[01:18:22] Speaker 00:
The authority for it being a discretionary determination.

[01:18:26] Speaker 00:
So it's a trial procedure question as to whether or not a party withdrew its consent.

[01:18:32] Speaker 00:
Certainly the interpretation of Rule 39C, that would be a legal question.

[01:18:36] Speaker 00:
What does the rule mean?

[01:18:38] Speaker 00:
For example, your honor posed the question earlier about how you interpret the word action.

[01:18:43] Speaker 00:
That would be a legal question.

[01:18:47] Speaker 00:
factual question as to whether or not a party sufficiently withdrew its consent, and in particular, whether it withdrew its consent at a time that was appropriate, that's within the trial court's ordinary management of its courtroom.

[01:19:01] Speaker 05:
And I guess that's my question.

[01:19:02] Speaker 05:
I mean, I think you're right that the trial court would get discretion in terms of whether a withdrawal of consent occurred or not.

[01:19:08] Speaker 05:
But on this record, I think the court acknowledged that there was a withdrawal of consent.

[01:19:12] Speaker 05:
And then the issue was what it's going to do about that.

[01:19:15] Speaker 05:
And I go back to the rule.

[01:19:17] Speaker 05:
If rule 39 is what governs this context, what in the rule gives the district court discretion to look at something that it acknowledges is a withdrawal and say, I'm not going to accept that?

[01:19:29] Speaker 00:
So a couple things, Your Honor.

[01:19:31] Speaker 00:
First, I just start with the operation of the rule.

[01:19:35] Speaker 00:
made clear in United Press Associations versus Charles that Rule 39 doesn't actually prohibit the holding of a jury trial.

[01:19:44] Speaker 00:
Rule 39, like Rule 38 together, are about preserving the right to a jury trial under the Seventh Amendment and the circumstances in which a party is entitled to it.

[01:19:53] Speaker 00:
There's not a constitutional right to a bench trial.

[01:19:58] Speaker 00:
Rule 39 itself, however, in thinking about consent, to get to the core of Your Honor's question, is a fact-based question in two senses.

[01:20:11] Speaker 00:
One, which Your Honor referred to as whether consent is withdrawn.

[01:20:14] Speaker 00:
The other is in the district court's management of the courtroom itself, whether the court could conclude that it was withdrawn too late.

[01:20:23] Speaker 00:
We know that there are cases where this court has found already, like Tomlinson Black, that consent was withdrawn too late.

[01:20:31] Speaker 00:
This court upheld the district court's determination in Tomlinson Black that consent was withdrawn too late.

[01:20:37] Speaker 05:
That's an unpublished decision, right?

[01:20:39] Speaker 00:
It is an unpublished decision, Your Honor.

[01:20:40] Speaker 00:
It's all we have to go on.

[01:20:42] Speaker 04:
When in your view, given how this was this large case, we have the MDL, and then it keeps shrinking.

[01:20:51] Speaker 04:
the various settlements that people drop out.

[01:20:54] Speaker 04:
When, in your view, was the earliest that Google could have said, we don't have any more legal issues here, we only have Ecuador?

[01:21:08] Speaker 04:
When was the earliest it could have withdrawn?

[01:21:13] Speaker 00:
Does Your Honor mean the latest that it could have withdrawn?

[01:21:15] Speaker 04:
I'm sorry, though.

[01:21:16] Speaker 04:
Well, no, actually, first the earliest, then the latest.

[01:21:20] Speaker 04:
Yes.

[01:21:20] Speaker 04:
Because how would it know?

[01:21:22] Speaker 00:
Well, it certainly could have made clear from the very outset that it believed that a jury was not appropriate on EPIC's claims.

[01:21:31] Speaker 00:
Google has truly excellent lawyers, obviously.

[01:21:35] Speaker 00:
And it understood the landscape.

[01:21:37] Speaker 00:
And there was a lot of discussion, and this is discussed in our papers,

[01:21:42] Speaker 00:
as part of the case management process where the district court expressed its preference to have a, and I quote, a jury trial first.

[01:21:53] Speaker 00:
Epic was actually looking to proceed faster than the class plaintiffs because there was going to be class certification and Epic was concerned about having its claims

[01:22:04] Speaker 00:
be delayed, and the district court said no.

[01:22:08] Speaker 00:
The district court said, we're going to have a jury trial, at least on some of these claims, because we have damages.

[01:22:12] Speaker 04:
So that goes to why I didn't say the latest.

[01:22:14] Speaker 04:
I said the earliest.

[01:22:16] Speaker 04:
So you're saying they should have said at the pretrial conference, oh, and don't forget, if some miracle occurs and we're

[01:22:23] Speaker 04:
The only people left standing along with EPIC, therefore we don't want a jury trial.

[01:22:28] Speaker 00:
Well, it's not so surprising a comment for them to have major honor.

[01:22:33] Speaker 00:
We had extensive discussion.

[01:22:34] Speaker 00:
Again, it's discussed in our briefs with the district court about how to structure this very complicated constellation of parties.

[01:22:42] Speaker 00:
One of the proposals that was on the table was that there would be a jury trial on claims for damages, and there would be a subsequent trial to deal with the equitable issues.

[01:22:55] Speaker 00:
Google signed on to a submission to the court in May of 2023 that we all signed on to that said there would be a jury trial for all plaintiffs on all claims.

[01:23:06] Speaker 00:
That was a determination.

[01:23:07] Speaker 05:
And I think that goes to, did Google consent at the outset?

[01:23:09] Speaker 05:
And that's a disputed point.

[01:23:11] Speaker 05:
When it comes to withdrawal, I don't know how those facts really matter other than you're saying it's too late.

[01:23:17] Speaker 05:
I go back to the rule and I don't know what in the rule tells me that I think about too late.

[01:23:22] Speaker 05:
But coming back to Judge McEwen's point,

[01:23:25] Speaker 05:
We have the month before all the settlement happens, and I don't know, was it a month?

[01:23:29] Speaker 05:
Maybe it was a little less than a month before the trial started that Google is on the record saying, hey, this might happen.

[01:23:35] Speaker 05:
Like, match might be out of this case, and then we're going to have to think about how it goes forward.

[01:23:41] Speaker 05:
And then when match is out of the case, my understanding from the record is that pretty immediately, Google says, that's now happened, and we have to change course.

[01:23:49] Speaker 05:
Do you dispute those sort of procedural facts?

[01:23:53] Speaker 00:
No, that's an accurate description of the timeline.

[01:23:55] Speaker 00:
What I'd add to it, however, Your Honor, is the important fact that the day that Google said, hey, we withdraw our jury consent, that was the day before 100 people showed up in the courtroom for voir dire.

[01:24:10] Speaker 05:
It was after we had- That would have a lot of resonance to me if the settlement had happened two months before and Google had waited around to bring it to the court's attention.

[01:24:18] Speaker 05:
But if Google is bringing it to the court's attention immediately after the settlement happens, what does that do to anything?

[01:24:24] Speaker 00:
But it means, well, the question is how close we are to trial, Your Honor.

[01:24:30] Speaker 00:
We were literally days away from starting the trial.

[01:24:34] Speaker 04:
What is the prejudice?

[01:24:35] Speaker 04:
What's the prejudice to Epic?

[01:24:35] Speaker 00:
The prejudice, Your Honor, is all of a sudden we have to change our trial presentation entirely.

[01:24:41] Speaker 00:
We've been planning this case to try it to a jury, trying a case to a judge versus trying a case to a jury.

[01:24:49] Speaker 00:
is a very different enterprise.

[01:24:51] Speaker 00:
I was trial counsel in this matter.

[01:24:53] Speaker 00:
I can assure you, Your Honor, we would have made a number of different choices in terms of witness order, what the expert testimony would have looked like, what the opening statements would have looked like if we even had them.

[01:25:05] Speaker 00:
There are a tremendous number of changes you need to make in order to tailor.

[01:25:08] Speaker 04:
Was continuance brought up?

[01:25:10] Speaker 04:
I mean, I know you have all these people that are pre-screened and you got them hanging out, not yet showing up at the courthouse.

[01:25:16] Speaker 04:
Was it ever talked about, you know, let's have at least a continuance to resolve the situation, or if it turns into a bench trial, then we would have a continuance.

[01:25:31] Speaker 00:
So I don't remember, Your Honor, one way or the other, whether that was discussed.

[01:25:35] Speaker 04:
That would make sense to me as a trial lawyer.

[01:25:39] Speaker 04:
You'd figure out, could this case be continued?

[01:25:42] Speaker 04:
one way or the other, and would it be prejudicial either to Epic or Google?

[01:25:47] Speaker 00:
Set aside, Your Honor, whether the timing of the match settlement was strategic, which I do believe it was, in order to try to disrupt the trial.

[01:25:56] Speaker 00:
I just don't remember one way or the other about whether the continuance discussion had happened.

[01:26:03] Speaker 00:
One point I would make, however, is to go back to United Press versus Charles.

[01:26:09] Speaker 00:
This court has already held that the holding of a jury trial when the parties don't consent was harmless error.

[01:26:16] Speaker 00:
In that case, that's a square finding of the court, that it was harmless error.

[01:26:21] Speaker 00:
And it makes sense that it be harmless error because there is, as I say, there's no constitutional right to a bench trial.

[01:26:29] Speaker 00:
And if there were,

[01:26:32] Speaker 00:
Excuse me.

[01:26:34] Speaker 00:
The only prejudice that Google has asserted so far about the holding of a jury trial is the supposed lack of factual findings than to support the injunction that was entered.

[01:26:46] Speaker 00:
Set aside our disagreement with the premise as to whether there were a separate set of factual findings.

[01:26:52] Speaker 00:
That's not a flaw in the liability issue.

[01:26:58] Speaker 00:
They're bifurcated.

[01:26:58] Speaker 00:
They're separate points.

[01:27:00] Speaker 00:
If this court is to decide that the district court didn't do a good enough job laying out the facts on which the injunction was based, then the court should proceed accordingly.

[01:27:11] Speaker 00:
But reversing the liability judgment or vacating the liability judgment is not necessary in that circumstance because the flaw would simply be, if there were a flaw,

[01:27:22] Speaker 00:
in the foundation for the specific injunctive remedies that the district court ordered.

[01:27:27] Speaker 00:
It wouldn't call the verdict itself into question.

[01:27:31] Speaker 05:
So I mean, that's sort of why I asked your friend across the aisle, what do we do if we think that there's a problem here?

[01:27:37] Speaker 05:
What do we do about it?

[01:27:38] Speaker 05:
I mean, it seems like one option would be to do a limited remand and ask the district court, this shouldn't have gone to the jury.

[01:27:45] Speaker 05:
It did.

[01:27:46] Speaker 05:
Now what?

[01:27:47] Speaker 05:
Because I was looking at the judgment as a matter of law ruling post trial and trying to figure out, is it harmless?

[01:27:54] Speaker 05:
Is the district court looking at this?

[01:27:56] Speaker 05:
Is the district court signaling to us exactly how it would have decided this case if it was deciding the case as opposed to the jury?

[01:28:02] Speaker 05:
And I'm not sure that I can get there from the post trial ruling, but is that a procedural option that we would have is to send it back to the court and say, tell us what you would do?

[01:28:13] Speaker 00:
Well, I think, Your Honor, what the court would do is, based on Rule 39C, say, treat the jury verdict as the decision of an advisory jury.

[01:28:23] Speaker 00:
There's no question the court could have had an advisory jury here.

[01:28:27] Speaker 05:
What's the problem with doing that and then clearing up the potential procedural problem?

[01:28:31] Speaker 00:
There are two problems.

[01:28:33] Speaker 00:
I mean, well, I'll take one away by assuming that there were error.

[01:28:37] Speaker 00:
But assuming that there were error, Your Honor, the problem is continued delay in bringing relief to a market that has been suffering under anti-competitive behavior for the better part of a decade.

[01:28:52] Speaker 00:
Sending it back for the district court to do the homework assignment of writing an opinion is completely unnecessary.

[01:29:01] Speaker 00:
And my friend made the comment earlier that there's a problem here because we don't have findings on market definition and findings on competitive effects from the district court the way we did in the Apple case sufficient for this court to assess, and I quote, the liability decision.

[01:29:20] Speaker 00:
Well, juries decide liability in antitrust cases all the time.

[01:29:24] Speaker 00:
There's no reason why this court needs to have a Rule 52 order to review a liability decision, even in an antitrust case.

[01:29:35] Speaker 00:
So sending it back for the district court to put together a long opinion, if it needs to be long,

[01:29:47] Speaker 00:
based on an advisory jury verdict is, in our view, make work.

[01:29:52] Speaker 04:
Well, that goes, I just want to hear a little more expansion on your argument that it's really a harmless error in any event, because it's not a question of right to a jury trial.

[01:30:01] Speaker 04:
It's like the obverse of that in some respects.

[01:30:04] Speaker 00:
Well, that's correct, Your Honor, and I take that from United Press versus Charles, which is, as I say, it's a decision of this Court.

[01:30:11] Speaker 00:
And there is no case that has been cited to this Court, no case of which we're aware, in which a jury verdict has been vacated.

[01:30:21] Speaker 00:
as a result of an assessment that it should not have gone to the jury and it should have been tried to the bench.

[01:30:28] Speaker 00:
To be sure, there was a claim in Google's opening brief that the Dunmore case went down this road.

[01:30:35] Speaker 00:
Google said in its brief that Dunmore was a case where the plaintiff refused to consent to a jury trial in the bankruptcy court and the bankruptcy court went ahead and tried it anyway.

[01:30:44] Speaker 00:
That's just not true.

[01:30:46] Speaker 00:
That's not what happened in the case.

[01:30:48] Speaker 00:
It's a misdescription of the facts of the case.

[01:30:50] Speaker 00:
In that case, there was no trial at all.

[01:30:53] Speaker 00:
In fact, the plaintiff wanted a jury and didn't get it.

[01:30:56] Speaker 00:
That was why this court reversed.

[01:30:58] Speaker 00:
It was the opposite.

[01:31:00] Speaker 00:
But there is no case in which this sort of homework assignment to go back and write a Rule 52 order has been entered and in which a jury verdict of liability has been vacated on the ground that it should have been tried to the bench.

[01:31:13] Speaker 04:
Well, let's jump ahead to the injunction.

[01:31:16] Speaker 04:
If we were to determine

[01:31:20] Speaker 04:
that there were infirmities in the injunction and it needed a remand.

[01:31:29] Speaker 04:
Do you think that that would intersect at all with this argument or the notion that Judge Forrest raises?

[01:31:36] Speaker 04:
Well, if we're going back for the remand on the causal or the scope of the injunction, how it affects network, affects

[01:31:46] Speaker 04:
Would that counsel for also having the judge make Rule 52 findings on the liability?

[01:31:55] Speaker 00:
I don't think so, Your Honor, because as I say, under Rule 39C, there's no question the district court could have had an advisory jury here.

[01:32:06] Speaker 00:
If we're going to send it back for factual findings sufficient to support the injunction, again, we don't think that's needed, but if it's going to go back for that,

[01:32:15] Speaker 00:
I think that it can go back for that, and that alone, the advisory jury decision would remain, and all you would need the district court to do at that point would be to enter sufficient findings based on the advisory jury conclusion to support a liability verdict for this court's review.

[01:32:33] Speaker 04:
I should- I want to ask about your injunction, then, because let's assume liability is established now.

[01:32:41] Speaker 04:
the district court trying to figure out, well, what do we do about this?

[01:32:49] Speaker 04:
It's sort of the open sesame of my catalog, including whatever bells and whistles needed to be added for Google Play to be able to do that.

[01:33:00] Speaker 04:
I'm having some trouble linking that to the network effects, because it's a global solution.

[01:33:09] Speaker 04:
Be enlightened by your description, please.

[01:33:12] Speaker 00:
OK, I'm happy to take that on, Your Honor.

[01:33:14] Speaker 00:
So there was a lot of evidence at trial about the network effects that were created by Google's conduct.

[01:33:23] Speaker 00:
I would direct the court just as a start to the district court's discussion of it at page 16 of the excerpts of record.

[01:33:29] Speaker 00:
But it appears regularly throughout the trial, there's this cute footnote in Google's reply brief saying the words network effects only show up once in the trial transcript.

[01:33:41] Speaker 00:
But the description of the chicken and egg problem and barriers to entry and two-sided markets and all of it is discussed again and again and again.

[01:33:49] Speaker 04:
You need apps, you need users, that whole bilateral discussion.

[01:33:53] Speaker 00:
Right.

[01:33:54] Speaker 00:
And so what the catalog access remedy is designed to do, and there's an extensive record on this,

[01:34:00] Speaker 00:
from the remedies proceedings, where there were 10 witnesses who testified over the course of two days, and there were hundreds of pages of submissions from the parties, both fact witness declarations as well as briefing.

[01:34:15] Speaker 00:
What that evidence showed is one way to overcome the barrier created by those network effects, what Your Honor called the bilateral issue,

[01:34:27] Speaker 00:
is to jumpstart on one side the access to one of the pools of things you need.

[01:34:38] Speaker 00:
So for example, you need a lot of users in order for developers to be interested to put their app on your store, but you need a lot of apps in order to have users want to come.

[01:34:51] Speaker 00:
So what the catalog access remedy does is it gives the store

[01:34:56] Speaker 00:
a critical mass of apps so that users will come to it.

[01:35:01] Speaker 00:
So if, for example, I'll take a real example rather than a hypothetical one, Amazon.

[01:35:07] Speaker 04:
That was just the one I was going to bring up because that's the one that there is testimony about.

[01:35:11] Speaker 00:
Right, well there's actually testimony in the record about several stores.

[01:35:15] Speaker 04:
Right, but that's really the most prominent because of what happened, so go ahead.

[01:35:19] Speaker 00:
Right, so Amazon, as the record shows, had difficulty getting users to come to the store, among other reasons, because it had an insufficient number of apps and couldn't get the developers to come because it didn't have the users.

[01:35:33] Speaker 00:
If the catalog access remedy is granted,

[01:35:37] Speaker 00:
Amazon will now be able to offer to potential users the full app catalog that exists on Google Play.

[01:35:47] Speaker 00:
So a user who previously said, I'm not going to download the Amazon store because it only has a small number of apps and who needs it,

[01:35:54] Speaker 00:
can now go to the Amazon store and get everything.

[01:35:58] Speaker 00:
Now, one thing to make very, very clear, Google still gets the money.

[01:36:04] Speaker 00:
This catalog access remedy does not take a dime away from Google.

[01:36:08] Speaker 00:
So the way it works is if they use it.

[01:36:11] Speaker 04:
It just potentially enhances Amazon's, right?

[01:36:15] Speaker 00:
It enhances Amazon's attractiveness as a store because it gets it past that chicken and egg hurdle created by the network effects, but it is then entirely on Amazon to enter into direct relationships with each of those developers.

[01:36:34] Speaker 00:
and have the developers put the store, put their apps, excuse me, directly on the Amazon store so that when a user goes to the Amazon store and says, hey, I like your, she said cows having fun, your cows app, if it's on the Amazon store, they'll download it from Amazon and if they make purchases in the cows app, that some portion of it may go to Amazon.

[01:37:02] Speaker 00:
But if it's not on the Amazon store,

[01:37:04] Speaker 00:
If Amazon doesn't do the work to build a relationship with the cow developer and the user goes and downloads the cow app from Amazon solely as a result of this catalog access feature, the money is going to go to Google.

[01:37:19] Speaker 00:
Google still gets the money unless and until each of its competitors, the other stores, does the work to build direct relationships.

[01:37:28] Speaker 01:
Now, one of Google's arguments is that the district court needed to make more specific causal connection findings, distinguishing Google first mover advantages that would give it, for lack of a better term, legitimate network effects versus ones that derived from anti-competitive behavior.

[01:37:48] Speaker 01:
Do you agree with that, with that framing?

[01:37:52] Speaker 01:
And if so, how did the district court comply with that requirement?

[01:37:56] Speaker 00:
I agree with Your Honor's framing of Google's argument.

[01:38:00] Speaker 00:
I disagree that that is something that the district court was obligated to do.

[01:38:04] Speaker 00:
I will say I think the district court did a fair bit of that as well.

[01:38:08] Speaker 00:
So let me take that in pieces.

[01:38:12] Speaker 00:
First of all, what the district court looked at

[01:38:15] Speaker 00:
is the whole range of conduct, and it's spelled out both in the order accompanying the injunction and in the judgment as a matter of law opinion, which is incorporated into that order on the injunction, and found that what Google did by entering into these exclusives and these agreements with developers and agreements with OEMs was to maintain, enhance, and therefore entrench its network effects.

[01:38:45] Speaker 00:
And a perfect example of that, there's a discussion on page 40, excerpt of record 40, which is from the Jamal opinion, of something that there was a lot of discussion about at trial called contagion.

[01:39:00] Speaker 00:
There was evidence showing that Google was concerned that if

[01:39:04] Speaker 00:
one app developer, one significant app developer chose to start its own store or chose to put its app on a competing store, then others would follow.

[01:39:16] Speaker 00:
There would be contagion.

[01:39:19] Speaker 00:
And Google was concerned that this would lead to other stores getting traction because they'd be getting over the network effects hurdle by amassing more and more stores and competition.

[01:39:32] Speaker 00:
If I could take the analogy too far,

[01:39:34] Speaker 00:
growing like a virus and metastasizing through its contagion from Google's perspective.

[01:39:41] Speaker 00:
And so what Google did is it engaged in one of the pieces of anti-competitive conduct that was found by the jury, is it paid app developers not to launch their products exclusively outside the Google Play Store.

[01:39:53] Speaker 00:
And what that did is it shut down the contagion.

[01:39:56] Speaker 00:
It prevented the conduct that would have eroded the network effects from which Google benefited.

[01:40:03] Speaker 00:
So that's why the district court said, and the district court cited to the Amazon example, I mean there's a lot in the record, but that's why the district court said, this is page 17 of the excerpts of record, that Google's conduct magnified

[01:40:18] Speaker 00:
enhanced, entrenched, maintained those network effects.

[01:40:22] Speaker 00:
Now, to take the second part of Your Honor's question, the idea that a party would need to go through and kind of quantitatively disentangle

[01:40:33] Speaker 00:
how much of the network effects were carryovers from conduct that happened before the anti-competitive conduct period under review began versus how much of those network effects were the direct result of conduct that happened

[01:40:53] Speaker 00:
during the course of the period is putting a burden on the district court that is way higher than is appropriate when a party has been found to violate the antitrust laws.

[01:41:04] Speaker 00:
The benefit of the doubt does not go to the wrongdoer.

[01:41:07] Speaker 00:
We have a situation here where the district court is vested with broad discretion to identify what needs to be done in order to fix the problem under optronic.

[01:41:19] Speaker 00:
As long as it's a reasonable means, those are the words in the case, a reasonable means that the district court has identified to address the consequences of the unlawful conduct, it should be upheld.

[01:41:30] Speaker 01:
I've been trying to parse through that paragraph in optronics because it does have the causal connection sentence and then it follows with citations to prior Supreme Court authorities that talk about this broad discretion.

[01:41:42] Speaker 01:
and the reasonableness standard on our end.

[01:41:46] Speaker 01:
How do we look at what should be reasonable?

[01:41:50] Speaker 01:
You know, it can't be so broad that it's meaningless, but how should we apply a reasonableness standard to review the remedial relief ordered?

[01:42:00] Speaker 00:
But I think the starting point, Your Honor, is the tremendous discretion that's vested in the district court who's familiar with the trial record and the kinds of anti-competitive effects that were found in the district court.

[01:42:16] Speaker 00:
And this court is familiar with that kind of abusive discretion standard in an injunction context.

[01:42:22] Speaker 00:
There needs to be some kind of identifiable nexus between the conduct at issue that was found to be anti-competitive and the harms that are sought to be remedied.

[01:42:38] Speaker 00:
not necessarily the specific action that's being required to be taken.

[01:42:42] Speaker 00:
So for example, in Massachusetts versus Microsoft, Microsoft was ordered to make available APIs and other software interfaces that it had not previously made available and that the court had expressly said

[01:43:02] Speaker 00:
played no role in the underlying antitrust violation.

[01:43:08] Speaker 00:
What was approved by the DC Circuit in Massachusetts v. Microsoft was a remedy that required Microsoft to take these steps because it would help restore competition, even though the withholding of those APIs was not something that had been challenged as a source of anti-competitive harm.

[01:43:29] Speaker 00:
And the reason that was upheld, and I think this goes back to your question about how to think about reasonable means,

[01:43:36] Speaker 00:
is because the court was able to draw, like the district court did here, a nexus between the harm that was caused, the maintaining the entrenching of those network effects so that others could not compete, and the remedy being ordered, which was a way to get over those network effects and help other competitors try to get off the ground, even though they didn't have that critical mass of apps.

[01:44:02] Speaker 00:
I should say, by the way, there are two remedies that are the subject of this causation argument in Google's papers.

[01:44:09] Speaker 00:
There's the catalog access that Judge McEwen asked about, but there's also this store distribution remedy.

[01:44:15] Speaker 00:
And the district court grounded this store distribution remedy both in the network effects issue, but also and separately

[01:44:24] Speaker 00:
on page 18 of the excerpts of record in the friction that Google had imposed.

[01:44:31] Speaker 00:
And there's at least a paragraph of discussion, factual findings by the district court in its order accompanying the injunction as to how there were steps that Google took

[01:44:42] Speaker 00:
to make it harder for users to obtain apps outside of Google Play by imposing technical friction.

[01:44:50] Speaker 00:
And this court is very familiar with the concept because it comes up again and again in cases, but extra steps that you need to go through to download, settings you need to change, warning screens you need to click through.

[01:45:03] Speaker 00:
And the district court found that as a result of those frictions, users

[01:45:10] Speaker 00:
were dissuaded from going to Google Play in the first place.

[01:45:15] Speaker 00:
Going outside of Google Play in the first place.

[01:45:18] Speaker 00:
And this store distribution remedy is intended to get past that by making stores available on Google Play so people can go and they can not have to suffer through these various restrictions.

[01:45:31] Speaker 00:
So that's an independent set of factual findings from the district court to support the store distribution remedy

[01:45:38] Speaker 00:
separate from but above and beyond and independent from the network effects findings that also support that same remedy.

[01:45:47] Speaker 01:
So as you know we've received many amicus briefs in this case and several of them have spoken to concerns about privacy and security with opening up Google Play to

[01:45:59] Speaker 01:
third-party stores or other things, or even extending the catalog out in a way that would make the systems more vulnerable, either by foreign entities or others.

[01:46:12] Speaker 01:
And in one of the briefs, there was a concern raised that the district court's order seemed a little bit too onerous, that security measures couldn't be taken unless they were narrowly tailored and

[01:46:23] Speaker 01:
and needed.

[01:46:24] Speaker 01:
Can you speak to that issue?

[01:46:26] Speaker 01:
Is there a possibility that the court is applying two owners of a standard for purposes of this broader point?

[01:46:35] Speaker 00:
Sure, Your Honor.

[01:46:37] Speaker 00:
I'll start just by observing that this was litigated the way it's supposed to be litigated in the trial court with evidence, with witnesses, with submissions from the parties, including fact declarations, expert declarations, and briefs.

[01:46:51] Speaker 00:
And amicus briefs that come in and provide untested facts I think should be taken with appropriate skepticism.

[01:46:59] Speaker 00:
especially given the source, as one of the amici who submitted, and Arsois pointed out, about who submitted amicus briefs for Google.

[01:47:07] Speaker 00:
But setting that aside and taking on the merits of Your Honor's question, yes, this was addressed in front of the district court in terms of what the security risks are and aren't.

[01:47:22] Speaker 00:
There was extensive evidence presented below about the ways in the past in which Google had misused security as a justification, as a pretext for engaging in anti-competitive behavior.

[01:47:38] Speaker 00:
There's some discussion of that at page 46 of the excerpts of record, which is the district court's judgment as a matter of law opinion.

[01:47:47] Speaker 00:
There's evidence we cited in our brief at pages 90 and 91 showing the same thing, that Google has misused security, but also that its remedy arguments overstated the security concerns that now are being echoed in the amicus brief.

[01:48:06] Speaker 04:
On that point, the whole point of the store distribution remedy is then

[01:48:15] Speaker 04:
that Google will be able really to soften any impacts by requiring and looking at privacy, security, and any other features, illegal sales, that sort of thing.

[01:48:34] Speaker 00:
That's exactly right, Your Honor.

[01:48:36] Speaker 04:
But then they can charge

[01:48:39] Speaker 04:
for the privilege of doing that.

[01:48:42] Speaker 04:
So that brings me to my price question.

[01:48:45] Speaker 04:
There's this argument between, well, three parts to it.

[01:48:48] Speaker 04:
One between a reasonable cost and another that they argue for is non-discriminatory.

[01:48:56] Speaker 04:
But when you address the reasonableness of, which is where it is now, it also underpins and talks about Google's costs as a benchmark for reasonableness.

[01:49:10] Speaker 04:
That seems like a direct price regulation.

[01:49:17] Speaker 00:
Two points on that, which I think will dovetail back to part of my answer to Judge Sanchez as well, but I'll start with that point directly.

[01:49:27] Speaker 00:
There's no prohibition in the law on antitrust remedies that require reasonable pricing.

[01:49:34] Speaker 00:
We see that in Glaxo from the Supreme Court.

[01:49:37] Speaker 00:
We see that in international boxing from the Supreme Court.

[01:49:40] Speaker 00:
That's relatively uncontroversial.

[01:49:43] Speaker 00:
The cost issue is a way of ensuring that Google doesn't do exactly what your honor suggested and gouge everyone in order to make this remedy ineffective.

[01:49:58] Speaker 04:
But then it wouldn't be reasonable pricing.

[01:50:01] Speaker 04:
Cost isn't the only foundation for how you determine reasonableness.

[01:50:06] Speaker 04:
Now you have the court saying, your reasonable prices, we're also going to inject

[01:50:13] Speaker 04:
this factor, the court ordered factor.

[01:50:17] Speaker 00:
The way I understand the use of based on actual cost, which is the language in the injunction.

[01:50:25] Speaker 00:
It doesn't say limited to actual cost.

[01:50:27] Speaker 00:
It says based on actual cost.

[01:50:30] Speaker 00:
I think it's intended to get at the following issue about which there was a lot of testimony, both at the remedy phase and at trial.

[01:50:38] Speaker 00:
One way that Google could charge for this security process is to charge all stores the same amount.

[01:50:48] Speaker 00:
If you have a store, you put it on, let's say you have 1,000 apps on your store, you get charged the 1,000 app price.

[01:50:57] Speaker 00:
You have 10,000 apps, you get charged a higher price because it takes Google more work.

[01:51:02] Speaker 00:
That would be kind of cost-based if they have to do more work, they can charge a little more.

[01:51:08] Speaker 00:
An alternative way hypothetically of pricing would be if you have a store that's really profitable.

[01:51:16] Speaker 00:
then Google's going to take 5% of your profits.

[01:51:19] Speaker 00:
And it'll take 5% of one person's profits versus 5% of someone else's profits.

[01:51:25] Speaker 00:
And then it's not charging based on its cost.

[01:51:28] Speaker 00:
It's taking essentially revenue share.

[01:51:30] Speaker 04:
You mean it's going to charge for its remedial software enhancements based on a percentage?

[01:51:39] Speaker 00:
I'm saying that's what the district court is intending to prevent by using based on actual costs.

[01:51:46] Speaker 00:
If there were a revenue proportionate charge that were being levied by Google on stores for this security review, that would undermine the purposes of the injunction.

[01:51:59] Speaker 05:
Isn't it relevant at that point?

[01:52:01] Speaker 05:
Is that how the market works generally?

[01:52:02] Speaker 05:
Or does the market work at a percentage cost?

[01:52:05] Speaker 05:
And that's how just generally business is done in this context.

[01:52:08] Speaker 05:
And if it's the latter, then we get back to Judge McEwen's point of how is this not the court sort of setting prices?

[01:52:15] Speaker 00:
Well, right now, this security review of other people's stores is not a market process.

[01:52:25] Speaker 00:
There is market review that Google does of the apps that are placed on Google Play currently.

[01:52:31] Speaker 04:
Every time it comes, somebody wants to be on Google Play, they do that.

[01:52:35] Speaker 00:
They do that then for the apps.

[01:52:37] Speaker 00:
Right now they don't take stores, and the district court injunction is requiring stores to be accepted.

[01:52:43] Speaker 00:
But when apps come and are placed on Google Play, there is a review that's done, and there's evidence in the record of the costs that Google bears.

[01:52:52] Speaker 00:
That's at nine ER 2066 through 2067, as well as nine ER 2026.

[01:52:59] Speaker 00:
And the cost-based

[01:53:05] Speaker 00:
the way that Google currently charges is exactly what it can, excuse me, the amount that Google currently spends on this is exactly what Google can continue to spend when it goes forward.

[01:53:17] Speaker 00:
The reason it's not to use the pejorative price regulation is it's intended as an anti-circumvention provision because if there were- And reasonableness doesn't do that?

[01:53:32] Speaker 00:
Well, again, I think that goes back to the notion of whether they're going to be charging on a revenue proportionate basis or whether they're going to be charging based on what they're actually expending.

[01:53:44] Speaker 00:
I mean, to take one step back, Your Honor, this entire issue,

[01:53:48] Speaker 00:
this review of security and especially the pricing, this was an accommodation to Google that the district court gave.

[01:53:56] Speaker 04:
Epic in the... They might not see it quite as an accommodation.

[01:53:59] Speaker 00:
Well, I'm certain, Your Honor, that they view the opportunity to review for security as an accommodation and the opportunity to charge for it as an accommodation because they argue for it quite vociferously in the district court.

[01:54:14] Speaker 00:
Obviously, they didn't want this remedy to be entered at all.

[01:54:16] Speaker 00:
But what they said to the district court is, if you are going to enter a remedy like this, please, we need to be able to do these two things.

[01:54:24] Speaker 00:
We need to be able to do a review and we need to be able to recover our costs.

[01:54:30] Speaker 00:
And the district court said,

[01:54:32] Speaker 00:
I'm going to let you do that.

[01:54:33] Speaker 00:
And I'll point out the district court did it over Epic's objection.

[01:54:36] Speaker 00:
This is by no means a everything Epic wanted, Epic got kind of injunction at all.

[01:54:42] Speaker 04:
What about the time frame addressing both the catalog store and the distribution?

[01:54:48] Speaker 04:
How did that come about?

[01:54:49] Speaker 04:
And it does seem to me that this catalog access is, what, three years?

[01:54:56] Speaker 04:
Is that right?

[01:54:57] Speaker 00:
That's correct.

[01:54:58] Speaker 00:
They're both three years.

[01:54:59] Speaker 04:
And how did that get determined?

[01:55:01] Speaker 00:
So the bid and the ask, so to speak, in the trial court was that Epic, through its experts, requested a six-year period.

[01:55:12] Speaker 00:
The justification for the six-year period was it's about two ownership cycles of a phone.

[01:55:21] Speaker 00:
Most people, on average, hold their phone approximately 2.7, 2.8 years before they get a new one.

[01:55:28] Speaker 00:
And the idea was that having two cycles, according to the expert economic testimony, would be sufficient to allow these remedies to take hold and let competition flourish the way the district court intends.

[01:55:45] Speaker 00:
Google obviously did not want the remedy to be entered at all and didn't proffer a proposed time frame in the event the court were to enter it.

[01:55:56] Speaker 00:
And what the district court did is it entered essentially one cycle.

[01:56:00] Speaker 00:
one ownership cycle the court said in open during the hearing that we had in August of twenty twenty three on this very remedy.

[01:56:10] Speaker 00:
The court expressed the view that six years was longer than the district judge

[01:56:17] Speaker 00:
believed would be appropriate, made the observation, as our experts made as well, that there's not a specific science to it.

[01:56:26] Speaker 00:
There is a degree of judgment and discretion about the amount of time necessary for these remedies to take hold.

[01:56:32] Speaker 00:
And what the district court ultimately did was settle on one phone ownership cycle rather than two.

[01:56:39] Speaker 05:
All right.

[01:56:40] Speaker 05:
We're approaching an hour again.

[01:56:41] Speaker 05:
Any other questions?

[01:56:44] Speaker 05:
All right.

[01:56:44] Speaker 05:
Thank you, counsel.

[01:56:45] Speaker 00:
I'm grateful for the court's indulgence.

[01:56:46] Speaker 00:
Thank you.

[01:56:49] Speaker 05:
All right, we'll hear argument from the United States.

[01:56:51] Speaker 05:
I think on this one, we'll set the clock at 10 minutes, which is twice what you guys agreed to.

[01:56:56] Speaker 05:
And then I'm going to ask Mr. Lawrence to stick to that time unless the bench is taking you over.

[01:57:04] Speaker 02:
Thank you for that, Your Honor.

[01:57:10] Speaker 02:
May it please the court, David Lawrence on behalf of the United States of America.

[01:57:14] Speaker 02:
We very much appreciate you hearing from us today what's already been a very robust argument on important issues.

[01:57:21] Speaker 02:
District courts have broad authority and discretion to craft monopolization remedies.

[01:57:27] Speaker 02:
And when the law has been violated, the remedy must restore competition.

[01:57:33] Speaker 02:
We're most concerned today that Google's arguments threaten those bedrock principles.

[01:57:39] Speaker 02:
We'd like to urge this court not to adopt categorical constraints proposed by counsel here on the remedial discretion of the district courts below.

[01:57:51] Speaker 02:
We're concerned that those constraints, if adopted, could prevent future courts from doing their duty under the law to restore competition to monopolized markets.

[01:58:01] Speaker 02:
I'd like to focus on three examples today, the refusal to deal issue, causation, and the technical committee.

[01:58:10] Speaker 02:
So first, as to refusal to deal, and this has been addressed at great length in the briefing, Google would like to import constraints in Trinco into the remedies phase.

[01:58:20] Speaker 02:
But Trinco is a liability case, not a remedies case.

[01:58:24] Speaker 02:
And Uptronic dealt with a very similar question and disposed of it by approving the supply remedies related to the telescopes in that case.

[01:58:32] Speaker 02:
I want to underscore that the difference between liability and remedies with respect to these kinds of considerations discussed in Trinco

[01:58:39] Speaker 02:
is a distinction with a difference.

[01:58:42] Speaker 02:
With liability, you're talking about planning the behavior of all potential monopolists for all time, because that's what liability rules do.

[01:58:52] Speaker 02:
That's what interpreting the Sherman Act does.

[01:58:56] Speaker 02:
When you have an independent violation of the law, the scope of the court's intervention is much narrower.

[01:59:02] Speaker 02:
It pertains to a single party,

[01:59:05] Speaker 02:
And it's in place for the limited duration of time necessary to, as the law requires, restore competition.

[01:59:14] Speaker 02:
And that authority, the remedial authority, is very broad, extending not only to ordering dealing like an electronic, but to restructuring an entire industry with divestitures, as Judge Sanchez pointed out, occurred in Ford.

[01:59:29] Speaker 02:
I do want to pause there because your colloquy with counsel brought up the fact that Ford was a merger case.

[01:59:35] Speaker 02:
such that you're just undoing the merger.

[01:59:37] Speaker 02:
That's not true for all of the divestiture cases on the books.

[01:59:41] Speaker 02:
United Shoe is a great example of a case where there was no merger related to the conduct.

[01:59:46] Speaker 02:
It was a section two case with a wide variety of conduct not dissimilar from here.

[01:59:50] Speaker 02:
The Supreme Court nonetheless thought it absolutely appropriate for the district court to consider a divestiture that would create a whole new shoe company out of whole cloth as a means of restoring competition to the market.

[02:00:09] Speaker 02:
Second, unless there are questions on the Trinco issue.

[02:00:14] Speaker 02:
The causation question, we've talked about that some this morning.

[02:00:20] Speaker 02:
Google is seeking to limit remedies meant to open a market with network effects solely to the quantum of network effects caused by the unlawful conduct.

[02:00:31] Speaker 02:
But that's not the causation requirement of Tronic.

[02:00:33] Speaker 02:
That paragraph sets up a reasonableness inquiry.

[02:00:38] Speaker 02:
The reviewing court asks, quote, if the relief is a reasonable method of eliminating the consequences of the illegal conduct.

[02:00:46] Speaker 02:
So in our view, the degree of intervention, the nature of the remedy, should be reasonable in light of the strength of the showing that the conduct caused the maintenance of the monopoly.

[02:01:00] Speaker 02:
Our concern is that Google is asking for a very different kind of causation requirement.

[02:01:05] Speaker 02:
This causation requirement would limit courts to addressing only those barriers to competition caused by the unlawful conduct.

[02:01:13] Speaker 02:
Here, the network affects barrier to entry.

[02:01:17] Speaker 02:
But courts have often found it and will often find it expedient to address their remedy to some barrier to entry other than the specific one involved in the case.

[02:01:28] Speaker 02:
And their discretion to do so when reasonable should be preserved.

[02:01:34] Speaker 02:
My counsel for EPIC here mentioned the Microsoft case.

[02:01:39] Speaker 02:
That's at 168 to 170, Mass v. Microsoft.

[02:01:42] Speaker 02:
I think that's a really important set of provisions to look at.

[02:01:44] Speaker 02:
These related to sharing APIs and communications protocols.

[02:01:49] Speaker 02:
At the time, the internet was just emerging and there was a thought that a closed system of Microsoft communications protocols among PCs could inhibit competition.

[02:02:00] Speaker 02:
That remedy required Microsoft to disclose those APIs and communication protocols, notwithstanding that, quote, non-disclosure of this proprietary information had played no role in our holding that Microsoft violated the antitrust laws.

[02:02:16] Speaker 02:
The court nonetheless thought it a reasonable means of recreating competition in the market, and it cites the exact reasonableness requirement on which Uptronic relied at the end of that paragraph.

[02:02:28] Speaker 02:
I think this case also underscores the need for courts to have the discretion to look to barriers to entry that aren't necessarily the same ones caused by the unlawful conduct.

[02:02:40] Speaker 02:
Here we have unlawful conduct that affected the point of sale, whether or not competing app stores were preloaded onto Android phones.

[02:02:49] Speaker 02:
Those Android phones are in the hands of millions of Americans today.

[02:02:54] Speaker 02:
Restoring competition just through that avenue could become more interventionist.

[02:02:58] Speaker 02:
loading app stores directly under the phones without the user desiring to, interacting with the point of sale in a really interventionist way.

[02:03:07] Speaker 02:
This court found what we think is very reasonable means of opening up competition.

[02:03:12] Speaker 02:
It took the app stores that are already there on the phone, the Google Play Store, and it said if the customer wants to download a competing app store, let it use that store for a limited period of time as necessary to reopen the market to competition.

[02:03:29] Speaker 02:
Next I'll turn to technical committees unless there are questions on causation.

[02:03:34] Speaker 02:
Great.

[02:03:35] Speaker 02:
So we're also very concerned that there not be artificial limits placed on the use of technical committees in these kinds of remedies, particularly in high tech markets where a district court can really benefit from the security or technical review of a committee below.

[02:03:51] Speaker 02:
We wanted to have the authority to craft that remedy.

[02:03:54] Speaker 02:
And I'd point the court to Besser, in which the Supreme Court looked at a very similar kind of technical committee to the one here.

[02:04:01] Speaker 02:
Not precisely identical, but similar.

[02:04:03] Speaker 02:
And that technical committee helped to determine reasonable rates for the patents that the Supreme Court agreed should be required to be disclosed.

[02:04:13] Speaker 05:
Should we not be concerned at all that the technical committee includes members of competing organizations?

[02:04:20] Speaker 05:
That seems to be a new step in the other cases that I've seen that have technical committees.

[02:04:27] Speaker 05:
I agree with you, it makes sense to have something like this, particularly in the technology space, to assist the court in administration of remedies.

[02:04:33] Speaker 05:
But that does seem to be an extension of where we've been before.

[02:04:38] Speaker 02:
Your Honor, so I'd agree with you that there's no exact corollary for this situation.

[02:04:42] Speaker 02:
So the other technical committee we'd point to is the Microsoft one, which didn't involve competitors in the same way because the United States and the states were the plaintiffs.

[02:04:53] Speaker 02:
We don't have a specific position on whether the extension to including a party in the technical committee is unreasonable, but we would only ask that the court review that determination through the reasonableness inquiry set forward in Uptronic and in other cases as to whether or not the court below abused its discretion by incorporating that element.

[02:05:20] Speaker 02:
I have two minutes left, so I'll just turn to a couple of liability issues on which we have positions.

[02:05:26] Speaker 02:
So first of all, the aftermarket issue.

[02:05:29] Speaker 02:
We think that Judge Sanchez hit on just the right question.

[02:05:33] Speaker 02:
Is this a durable good?

[02:05:35] Speaker 02:
The durable good phrasing is in the aftermarket cases that are already at issue here.

[02:05:41] Speaker 02:
And here we have a very different durable good dynamic because the durable goods are manufactured by a lot of different sorts of competitors.

[02:05:49] Speaker 02:
And I think that extending it beyond that into this situation, for example, because the operating system is always present, something we should be really cautious about doing.

[02:06:00] Speaker 02:
As Council for Google explained, this is an economic presumption.

[02:06:04] Speaker 02:
This is a presumption of economic effect in this aftermarket context that replaces the normal wide-ranging anti-competitive and pro-competitive effects determination.

[02:06:16] Speaker 02:
We should be very wary of extending an economic presumption into a new economic circumstance without being really confident that it well suits that circumstance.

[02:06:26] Speaker 04:
Well, that kind of argument, of course, would preclude us in a lot of these technology cases, because technology changes very quickly.

[02:06:36] Speaker 04:
And the technology may not be a durable good.

[02:06:38] Speaker 04:
It might not be attached to a durable good.

[02:06:41] Speaker 04:
So I'm a little surprised.

[02:06:43] Speaker 04:
I mean, you can argue that.

[02:06:45] Speaker 04:
The court here did do a sufficient job, but is this an extension what the court did in any way?

[02:06:54] Speaker 02:
I don't think what the court did here is an extension.

[02:06:56] Speaker 02:
I think that what counsel for Google is asking for would extend the aftermarket line of cases beyond those that are keying off of a durable good into those where it's, let's say, it's an operating system.

[02:07:10] Speaker 04:
Of course, they would argue with you, no, we have the durable good.

[02:07:12] Speaker 04:
We got the phones.

[02:07:14] Speaker 04:
I don't want to argue the point.

[02:07:16] Speaker 04:
I'm just saying that it's a question of terminology.

[02:07:19] Speaker 02:
Yes, Your Honor, but here the phones are manufactured by a host of different manufacturers.

[02:07:23] Speaker 02:
So this is more like VCRs were in the 80s.

[02:07:26] Speaker 02:
There's a lot of people making VCRs.

[02:07:29] Speaker 02:
Yes, there's a single standard.

[02:07:31] Speaker 02:
They're all using the same sort of video technology.

[02:07:33] Speaker 02:
But that doesn't necessarily mean that we're in an aftermarket situation.

[02:07:37] Speaker 02:
And the economics are different when you have multiple manufacturers.

[02:07:41] Speaker 02:
The degree to which upstream manufacturer investment is impacted by aftermarket behavior.

[02:07:46] Speaker 02:
It's all just different.

[02:07:47] Speaker 02:
And so there's not a lot of huge benefit to extending this economic presumption.

[02:07:53] Speaker 02:
There's also the costs.

[02:07:55] Speaker 02:
Because in these circumstances, you could get it wrong.

[02:07:58] Speaker 02:
Instead, we have the reasonableness inquiry that's already in section two.

[02:08:03] Speaker 02:
Here, we have a jury that in fact found that there was exclusionary conduct and anticompetitive effect.

[02:08:09] Speaker 02:
That's the fulsome inquiry that the economic presumption is helping to replace.

[02:08:14] Speaker 02:
And there's not a huge benefit to going that far when you're able to do the full analysis.

[02:08:21] Speaker 02:
The last issue I'd hit briefly is just the issue, preclusion issue, and the United States issue, interest in particular.

[02:08:37] Speaker 02:
Go back to what Judge Farris said about the core issue in the antitrust laws being that each case must be taken on its own facts.

[02:08:44] Speaker 02:
And the remedies law that has developed permits district courts to craft remedies based on the specific facts and circumstances before them.

[02:08:52] Speaker 02:
We urge this court to preserve that capability.

[02:08:56] Speaker 02:
Thank you.

[02:09:05] Speaker 05:
All right.

[02:09:06] Speaker 05:
I think we've had a pretty full presentation today of lots of different issues, but we'll give you, let's put 10 minutes on the clock for rebuttal, and I would ask you to do the same as Mr. Lawrence.

[02:09:14] Speaker 05:
Let's stick with that time unless the bench takes you over.

[02:09:17] Speaker 03:
Thank you, Your Honor.

[02:09:19] Speaker 03:
I'd like to start with the jury versus bench trial issue.

[02:09:22] Speaker 03:
Judge Forrest, we agree that there is no basis in Rule 39 to force a party into a jury trial.

[02:09:28] Speaker 03:
The only case that Epic pointed you to was not only an unpublished case, the Tomlinson case, but in that case, the withdrawal came at the charge conference.

[02:09:37] Speaker 03:
So that is a very different set of circumstances than a party who makes clear it does not consent before the trial begins.

[02:09:43] Speaker 03:
In terms of prejudice, we didn't get a liability ruling consistent with Rule 52A.

[02:09:49] Speaker 03:
And if you really want to understand what that means, if you look at the Apple case,

[02:09:55] Speaker 03:
I hear EPICS Council in the United States talking about sub-markets and overlapping markets and how that might play a role here.

[02:10:02] Speaker 03:
We have no idea what the consideration was of why this was a sub-market if it was, an overlapping market if it was, a different market.

[02:10:11] Speaker 03:
None of that is spelled out in the ruling.

[02:10:14] Speaker 03:
That is prejudice.

[02:10:15] Speaker 03:
The joint submissions that I heard EPIC's counsel refer to that occurred pre-trial, pre-settlement of other people, specifically were couched in language saying, if the trial includes EPIC, match, the states, and the individuals, then we agree to a single trial.

[02:10:35] Speaker 03:
That is a very different circumstance from what happened.

[02:10:39] Speaker 03:
on preclusion, very briefly.

[02:10:43] Speaker 03:
Not applying preclusion here really turns things upside down, and I want to stress why.

[02:10:48] Speaker 03:
It would mean that even though Google has more open policies than Apple, Google's policies could be deemed illegal when this court already found that Apple's policies were not.

[02:11:01] Speaker 03:
And this would saddle Google with obligations against its chief rival

[02:11:06] Speaker 03:
exactly what the Supreme Court cautioned against in Alston, injunctions that end up impairing rather than enhancing competition on after markets.

[02:11:19] Speaker 03:
The United States has made an argument for the first time today, not in their brief, about after markets.

[02:11:24] Speaker 03:
But the definition of after markets that this court gave in the Apple case did not limit it to a durable good in the typical concept of a durable good.

[02:11:35] Speaker 03:
It specifically found that, quote, smartphone operating systems could be a foremarket for a aftermarket that was purchases you made on a device using that smartphone.

[02:11:48] Speaker 03:
That is exactly what we have here.

[02:11:50] Speaker 03:
And the aftermarket burden should have applied to Epic in this case, just like it did in the Apple case.

[02:11:59] Speaker 03:
Turning to the remedy.

[02:12:01] Speaker 03:
And I want to start by just reminding the court when we're thinking about this remedy that this is a monopoly maintenance case, not an acquisition.

[02:12:09] Speaker 03:
Epic has never said that any of the challenged conduct here is what enabled Google to acquire a monopoly.

[02:12:16] Speaker 03:
It's a maintenance case.

[02:12:17] Speaker 03:
And that's really important, because Judge Sanchez, I heard your questions trying to really get at

[02:12:22] Speaker 03:
what it is that you're trying to do with a remedy.

[02:12:26] Speaker 03:
And here's one way of thinking about it, and it's especially, I think, meaningful in a monopoly maintenance case.

[02:12:32] Speaker 03:
You're trying to draw the line, the court is trying to draw the line between what are fruits of the unlawful conduct, the violation, and what are fruits of innovation, investment, having a better product, being a first mover, because none of those things

[02:12:48] Speaker 03:
are supposed to be removed from a defendant because of an antitrust violation.

[02:12:54] Speaker 03:
And so that's why getting right exactly what the consequences of the violation are.

[02:13:00] Speaker 04:
Let me ask you then about the timing, because one of your arguments is that, I think it was before 2019, there's obviously a huge amount of innovation, acquisition of market, et cetera.

[02:13:12] Speaker 04:
Do you think that it was incumbent on the trial court

[02:13:18] Speaker 04:
in fashioning the remedy to, in effect, make some kind of temporal division there?

[02:13:25] Speaker 04:
And is that feasible?

[02:13:28] Speaker 03:
I think it was at least incumbent on the court to acknowledge why it found particular evidence meaningful to the consequence that it was drawing from the conduct.

[02:13:41] Speaker 03:
So for example, Epic pointed to the contagion evidence they talked about.

[02:13:46] Speaker 03:
That contagion evidence is about a contract that began in December of 2019.

[02:13:52] Speaker 03:
So any impact that it had on anything was not the world as it existed prior to December 2019.

[02:13:59] Speaker 03:
And the court seemed to miss the importance of really honing in on the particular

[02:14:07] Speaker 03:
consequences of the particular conduct and it did that your honor I think because it just kept waving at the jury verdict and saying well the jury verdict already resolved this.

[02:14:17] Speaker 03:
That is not what the court's job is in a remedies proceeding and the Microsoft example is a really good one because there the court spent as I noted in my opening 32 days trying to really get at what the consequences were.

[02:14:34] Speaker 01:
I wonder if you're proposing something that might be impossible to really parse.

[02:14:39] Speaker 01:
There are early network advantages from an early mover, and then there's evidence of anti-competitive behavior to shore that up and insulate it.

[02:14:51] Speaker 01:
Is that actually possible?

[02:14:52] Speaker 01:
I mean, is that really the requirement that we would make of a court to somehow be able to disentangle those things?

[02:15:00] Speaker 01:
I have a hard time seeing how one could do that.

[02:15:03] Speaker 03:
I don't think that it requires perfection.

[02:15:06] Speaker 03:
I think reasonableness actually probably is the appropriate touchstone, but reasonableness of the inquiry that the court is tasked with doing.

[02:15:14] Speaker 03:
So I would suggest that there were at least three missing pieces to what the district court did here.

[02:15:19] Speaker 03:
The first is that there was no record-based finding as to what specific anti-competitive conduct enhanced Play's network effects and how it did so.

[02:15:30] Speaker 03:
There was simply no attempt to address that.

[02:15:33] Speaker 03:
The second is that there was no analysis of where Google's network effects stood at the start of the relevant time period in 2016 and where they finished at the time the court was looking at the injunction.

[02:15:46] Speaker 03:
This matters because, for example,

[02:15:47] Speaker 03:
The court looked at this Amazon presentation and used that as an example.

[02:15:52] Speaker 03:
The Amazon presentation is from 2017.

[02:15:54] Speaker 03:
And at that point in time, the Amazon presentation says, Google already has network effects.

[02:16:00] Speaker 03:
The other Amazon evidence in the record is that Amazon decided not to invest as a result in its app store in the same way that Google did.

[02:16:10] Speaker 03:
And the court didn't grapple with any of this because it didn't view, in fact, it described as not salient the notion of looking at causation.

[02:16:20] Speaker 03:
And then the third.

[02:16:20] Speaker 04:
So on that point, for example,

[02:16:22] Speaker 04:
Are you suggesting then that because this occurred before 2019 that it wouldn't have any impact in terms of the ongoing market and shouldn't be looked at?

[02:16:31] Speaker 03:
Oh, no.

[02:16:32] Speaker 03:
I think it could be looked at, but it could be looked at for what impact it had starting in 2019.

[02:16:37] Speaker 03:
OK.

[02:16:38] Speaker 03:
And so if I misspoke, I don't want to.

[02:16:39] Speaker 04:
No, I just wanted to understand, because this temporal issue I think is an important one that actually both sides have talked about.

[02:16:47] Speaker 03:
It is, and I think it gets at the third thing that I was going to suggest that the district court missed in its presentation, which is that it made no meaningful attempt to engage with why Google's early mover status, Google's extensive investment, Google's innovation, competitors' lack of investment, and Google's superior product, how all of that played a role in thinking about what the consequences are.

[02:17:11] Speaker 03:
I was really surprised to hear both Epic and the United States talk to you about the Microsoft case today and the disclosures that were required as part of the Microsoft case.

[02:17:21] Speaker 03:
And the reason is those disclosures were agreed disclosures that were part of a consent decree.

[02:17:27] Speaker 03:
That is not remotely similar to a court-ordered injunction of a disclosure.

[02:17:32] Speaker 03:
They came up in the D.C.

[02:17:33] Speaker 03:
Circuit because Massachusetts, which had chosen not to settle, just like Epicure, was asking for more.

[02:17:40] Speaker 03:
And the court, the D.C.

[02:17:42] Speaker 03:
Circuit said, we're not going to give Massachusetts more.

[02:17:44] Speaker 03:
the parties already agreed to these particular disclosures, and those are sufficient to remedy the harm.

[02:17:50] Speaker 03:
That underscores two things.

[02:17:52] Speaker 03:
One is that the district court here erred by ignoring, for now, over a year, the state settlement.

[02:17:59] Speaker 03:
And two, that it really wasn't focused on what the impact was that it was trying to remedy.

[02:18:06] Speaker 03:
I heard the lawyer for the United States tell you that the remedy must restore competition.

[02:18:12] Speaker 03:
I don't want to be very clear, because Judge Donato said some of those same things.

[02:18:16] Speaker 03:
That is not right.

[02:18:17] Speaker 03:
That is the first half of the sentence I said.

[02:18:19] Speaker 03:
And if you look at page 16 of DOJ's brief, he may have just been embellishing an argument, but the remedy must undo the consequences.

[02:18:27] Speaker 03:
That's what DOJ itself says at page 16.

[02:18:31] Speaker 03:
DOJ, as I heard them today, is asking you to rewrite optronic, to remove this causal connection language, which comes from the DC Circuit's Microsoft case, which comes from all the old cases all the way back to international assault, that really are focused on lifting the impact from the conduct that's been challenged and not going any more broadly to ensure that antitrust law doesn't inhibit

[02:18:57] Speaker 03:
companies like Google from continuing to invest and innovate and be early movers.

[02:19:02] Speaker 03:
All of those things are why courts proceed with caution.

[02:19:05] Speaker 03:
I think Alston put it best when it said, when it comes to remedies, caution is key.

[02:19:10] Speaker 03:
And so I would encourage the court to ensure that the first principles of antitrust law are upheld and to reverse both the liability ruling and the injunction below.

[02:19:20] Speaker 03:
Thank you, Your Honors.

[02:19:22] Speaker 05:
Thank you, counsel.

[02:19:24] Speaker 05:
I want to take the opportunity to thank all counsel in this case.

[02:19:26] Speaker 05:
Your advocacy has been extremely high level, and we really appreciate it in a case like this where we want to make sure we get it right.

[02:19:35] Speaker 05:
So the case of Epic Games versus Google is under submission for decision, and the court is in recess until tomorrow morning.