Epic Games, Inc. v. Apple Inc.

This case presents two critical questions regarding the legal standards governing the Rule of Reason, which determines the outcome of nearly every Sherman Act case. It is well settled that a restraint that has both pro- and anticompetitive effects is unlawful if a “less-restrictive alternative” will achieve the same benefits while harming competition less. The circuits are divided, however, on two issues that were outcome-determinative in this case:

1. the legal test for identifying a less-restrictive alternative; and (2) if no less-restrictive alternative exists, whether the restraint is valid even when (as in this case) the court finds harms to competition that vastly outweigh the benefits. The Questions Presented are:

2. Must a less-restrictive alternative be free from additional costs to the defendant?

3. If there is no less-restrictive alternative, is the restraint invalid if the harms to competition substantially outweigh the restraint’s procompetitive justification?