Antitrust Law Daily Wrap Up, ANTITRUST—S.D.N.Y.: Claims against electronic health record provider Epic can proceed, (Sep 8, 2025)

By Donielle Tigay Stutland, J.D.

Particle adequately alleged that the payer platform market consists of only two players, Epic and Particle, and that Epic’s conduct was sufficiently anticompetitive, and intended to exclude Particle from that market.

The federal district court in New York City granted in part a motion to dismiss a suit brought by Particle Health Inc. (Particle) against electronic health records company Epic Systems Corporation (Epic) which allehed that Epic engaged in monopolistic and anticompetitive practices. The court granted Epic’s motion to dismiss Particle’s claim under Section 1 of the Sherman Act and the Donnelly Act, as well as the claims for tortious interference with business relations, defamation, and trade libel. However, the court denied Epic’s motion to dismiss Particle’s claims under Section 2 of the Sherman Act, as well as the claim for tortious interference with contract (Particle Health Inc. v. Epic Systems Corp., No. 1:24-cv-07174-NRB (S.D.N.Y. Sept. 5, 2025)).

Background. Epic operates the most widely used software platform in the United States for maintaining electronic health records (EHR). Epic released its Epic Payer Platform (the “EPP”), the first payer platform in the United States, in 2021. in 2023, Particle began to make its EHR software program, which combines record retrieval and storage with an analytics service, available to “pay-viders,” or payers who also offer treatment-related services.

Particle alleges that, in recent years, Epic has used its outsized influence in the EHR software market to expand into the growing market for “payer platforms[.]” Particle asserts that Epic first became aware that Particle had entered the payer platform market in late 2023, after it discovered that Particle had contracted with a software vendor to integrate Particle’s payer platform capabilities into software used by Blue Cross Blue Shield of Michigan to assist in preparing “Gaps in Care” reports. Epic filed a formal dispute against Particle with Carequality on March 21, 2024. The dispute alleged Particle violated policies by: (i) allowing customers to mislabel non-treatment EHR requests as "treatment"; and (ii) using a gateway masking requester identities. Particle contends that the two companies discussed Epic’s concerns and, after Particle explained its position, Epic “indicated that it understood the model and did not dispute that Particle was correct” in its position that the records had properly been requested for “treatment” purposes and the secondary use of patient EHRs at issue was permitted.

Around the same time that Epic filed that dispute, beginning in late March 2024, it stopped responding to EHR retrieval requests from 34 Particle customers, constituting roughly 20% of Particle’s overall userbase. Although Epic stated on an April 8, 2024 call that these Particle customers’ connections had been suspended due to a “technical” issue, it later confirmed that it had intentionally stopped providing records to these customers due to its concern that the customers had mislabeled EHR requests as being for “treatment purposes” when they should have been labeled for another purpose. Without access to Epic-stored records, these Particle customers were unable to assess claims, underwrite risk, or provide any treatment-related services. Particle alleges that Epic subsequently advised Particle’s customers that it would restore their access to Epicstored EHRs “if and only if” they stopped using Particle’s platform.

Particle contends, on information and belief, that Epic made representations to Particle customers, causing at least ten unnamed “significant” customers to repudiate their contracts, threaten to do so, or demand that Particle make financial concessions to prevent them from doing so.

In April 2024, Epic enacted a policy requiring its Care Everywhere Governing Council (15 volunteers from Epic's customer base, overseeing Epic's record-sharing) to pre-approve every new Particle customer or expansion (e.g., adding a doctor's office), demanding detailed disclosures (business model, record use, data processes) not required for non-Particle users. This slowed approvals from under two days to over a month (up to three months in one case), effectively blocking market entry. Customers must also acknowledge Epic's alternative services. On April 10, 2024, Epic issued an "Issue Notification" to customers titled "Third-Party and Privacy Risk," claiming Particle's practices risked HIPAA violations. Epic also allegedly convinced Carequality to withhold a planned joint press release affirming Particle's good standing.

Particle also asserted that although its market share had been growing before March 2024, its revenue growth dropped significantly in the months after Epic began to take the anti-competitive actions, such that Particle was “barely able to meet one third of its previous projections, which up to that point it had regularly exceeded.”

Particle filed suit against Epic on September 23, 2024, alleging monopolization and attempted monopolization, monopoly leveraging, and violation of New York General Business Law. Epic moved to dismiss the complaint. Epic contends that Particle’s antitrust claims must be dismissed because Particle has failed to plausibly allege: (i) the existence of a relevant antitrust product market; (ii) that Epic engaged in anticompetitive conduct; and (iii) antitrust injury.

Relevant product market. Epic first argued the complaint should be dismissed because Particle failed to allege a relevant product market. The court indicated that this issue required more focused discovery on the market definition and would be better informed by limited discovery addressing: (i) the definitions of “payer” and “payvider,” and whether either or both of the parties’ payer platform products have payers and/or payviders as customers; (ii) the exact functions offered by the parties’ payer platform products, and specifically the unique characteristics identified by Particle (i.e., retrieval at scale, storage, and analytics); and (iii) the existence of alternative products available to suit payer needs.

Restraint of trade. The court granted Epic’s motion to dismiss the claims brought under Section 1 of the Sherman Act. Epic argued that this claim must be dismissed because Particle has failed to sufficiently allege the existence of one or more agreements in restraint of trade. Section 1 prohibits "every contract, combination... or conspiracy... in restraint of trade." and the court highlighted that: “‘The crucial question in a Section 1 case is . . . whether the challenged conduct stems from independent decision or from an agreement, tacit or express.’” Particle alleged vertical agreements between Epic and: (1) the Epic Care Everywhere Governing Council; (2) Particle’s customers and prospective customers; and (3) Carequality and Carequality Steering Committee members.

As to any agreement between Epic and the Epic Care Everywhere Governing Council, the court found that the Council lacks independence, and accordingly, the court determined that Particle’s allegations cannot “support a reasonable inference that [Epic and the council] have ‘separate corporate consciousnesses.’”

Next the court turned to Particle’s allegations that customers and prospective customers consummated agreements with Epic by “acquiescing to Epic’s conditions on dealing and communicating their acquiescence to Epic.” However, the court noted that the complaint contains no further details regarding any specific agreement between Epic and one of Particle’s prospective or former payer customers.

Particle’s final allegation was the existence of an agreement between Epic and Carequality and the Carequality Steering Committee, contending that Epic brought a dispute against it via Carequality’s dispute resolution process and used its influence over Carequality to pressure the Steering Committee into imposing a corrective action plan on Particle. Here, the court also determined that the complaint’s allegations fall far short of establishing that Epic and Carequality entered into an agreement to unreasonably restrain trade in the payer platform market. The court dismissed the claims brought under Section 1 of the Sherman Act.

Monopolization. The court next turned to Particle’s claims for monopolization, attempted monopolization, and monopoly leveraging under Section 2 of the Sherman Act. Epic argued that each claim must be dismissed because the complaint fails to plausibly allege that Epic engaged in anticompetitive conduct. The court disagreed.

The court outlined that Particle alleged that “Epic has willfully maintained its monopoly power by: (1) cutting off Particle customers’ access to Epic-stored EHRs unless they agreed not to do business with Particle; (2) prolonging the approval process for new Particle customers to access Epic-stored EHRs; (3) launching a “market-wide disparagement campaign” against Particle,; and (4) initiating an allegedly manufactured dispute within Carequality and manipulating its outcome. While Epic argued that iy had legitimate reasons to be concerned about the privacy and security of patient health records that were being requested using the Particle platform, noting that health care organizations have a “high sensitivity to” privacy and security issues, the court indicated that “[i]n determining whether a complaint states a claim[] that is plausible, the court is required to proceed ‘on the assumption that all the [factual] allegations in the complaint are true.’” The court concluded that “the complaint, taken as a whole, alleges Epic’s willful intent to acquire monopoly power in the payer platform market via anticompetitive conduct. Particle has adequately alleged that the payer platform market consists of only two players, Epic and Particle, and that Epic’s conduct was sufficiently anticompetitive, and intended to exclude Particle from that market.” The court concluded that at this stage of the litigation, Particle has identified conduct sufficient to raise a non-speculative inference that Epic’s actions were uneconomic and inconsistent with the rational behavior of a legitimate competitor.

The court also found that Particle adequately pled the first and third elements of an attempted monopolization claim, and that specific intent can be inferred from predatory pattern. The court also found that Particle plausibly alleged anti-trust stading, as Particle pled direct competitor injury (exclusion from market, lost sales/customers, reduced competition) flowing from Epic’s conduct which had competition-reducing effects.

State law claims. The court found that Particle sufficiently alleged that Epic was aware of the basic terms and conditions of the contract between XCures and Particle — i.e., that XCures paid certain fees to Particle in order to continue their business relationship — and that Epic endeavored to interfere with this basic contractual arrangement when it informed XCures that its access to Epic data would be restored if it ended its relationship with Particle. The court denied Epic’s motion to dismiss Particle’s claim for tortious interference with contract.

The court granted the motion to dismiss the claim for tortious interference with prospective business relations with any third party for failure to allege that Epic had any knowledge of Particle’s prospective business relationships with the four third parties named in the complaint. The court also granted the motion to dismiss the claims of defamation and trade libel.

The Case is No. 1:24-cv-07174-NRB.

Judge: Buchwald, N.

Attorneys: Kathryn Delveaux Bonacorsi (Quinn Emanuel Urquhart & Sullivan, LLP) for Particle Health Inc. Lauren Ann Moskowitz (Cravath, Swaine & Moore LLP) for Epic Systems Corp.

Companies: Particle Health Inc.; Epic Systems Corp.

Cases: Antitrust NewYorkNews