Federal antitrust lawsuit against Wisconsin-based Epic Systems will move forward

A federal judge is allowing an antitrust lawsuit against Epic Systems to move forward, while dismissing some of the claims made against the Verona-based health software company.

Particle Health, a New York health data startup, sued Epic in a New York federal court last year, accusing the Wisconsin company of violating antitrust law and defaming Particle.

Epic operates the most widely used software platform in the United States for maintaining electronic health records, according to a court order issued Friday by U.S. District Judge Naomi Reice Buchwald. 

Particle’s suit claimed Epic has used its outsized influence in the electronic health records market to expand into the growing payer platform market. Particle defined payer platforms as software that lets insurance companies request and receive electronic health records. Epic launched its payer platform in 2021 and Particle entered the market in 2023. 

Particle is accusing Epic of retaliating against the company by blocking customers from accessing Epic’s records network, slowing approvals for new Particle customers. It also alleges Epic accused Particle of mishandling data and pressured customers to stop working with Particle.

Epic had tried to get the lawsuit thrown out in its entirety.

The court dismissed Particle’s claims that Epic entered into an unlawful conspiracy because Particle did not show that Epic entered into agreements with other parties to limit competition. The court also dismissed claims that Epic committed defamation and “trade libel” against Particle.

“Although Particle names certain customers who ceased their relationships with Particle, it does not specifically allege that these customers abandoned their relationships with Particle based on the two allegedly libelous statements identified in the Complaint,” Buchwald wrote.

But the court found that Particle provided enough detail to let its monopolization claims move forward. The court also found Particle had standing to pursue its antitrust claims.

“Particle has alleged that it has lost both customers and revenue as a result of Epic’s conduct, and that this conduct has harmed competition in the payer platform market as a whole,” Buchwald wrote. “It remains to be seen whether Particle’s allegations will be borne out in discovery.”

Peter Carstensen, a professor emeritus at the University of Wisconsin Law School specializing in antitrust law, said both sides will need to share information in discovery to make their case.

He expects the first focus will be to determine whether the payer platform market could reasonably be considered a true market.

“If Particle can’t establish the plausibility of that market, such that the judge believes a reasonable jury could find that there is such a market, then the case is over,” Carstensen said. “If the judge is satisfied of that, then the next step is to look at the conduct and the question of whether the conduct was unlawful, or whether there were justifications for Epic’s conduct.”

The judge wrote that both Epic and Particle disagreed about whether their products “perform the same basic functions” and that “focused discovery should shed light on these issues.”

Both companies are framing the court’s decision as a win. 

A spokesperson for Epic said in a statement the court dismissed most of Particle’s claims. 

“Epic has worked and will continue to work to protect the privacy of patients’ data,” the statement reads. “We look forward to the opportunity to present evidence to prevail on the remaining claims.”

Meanwhile, Particle Health CEO Jason Prestinario said on social media that he was pleased at the outcome because Epic’s motion to dismiss was denied on the “core monopolization and antitrust claims.”

“This is the first time in Epic’s history that an antitrust case against them has gotten to this point,” Prestinario wrote. “It’s the next step to a bigger victory for better patient care and more patient control of their medical info.”

Carstensen said the case is notable because Epic hasn’t been “successfully challenged for its conduct” as the dominant firm in the electronic health records space. He said there have been concerns about the ways Epic has added to its system that have arguably squeezed out competition. 

He said the case reflects other antitrust cases against big tech companies, like Google, Facebook and Amazon.

“It shows that these same issues arise in all kinds of other fields where there is a dominant firm,” he said.

The Particle lawsuit is not the only antitrust challenge Epic faces. Earlier this year, CureIs, a California-based company that works with managed care organizations, filed a similar case in federal court there.