Federal Court Allows Particle Health’s Antitrust Case Against Epic to Proceed

A federal judge has allowed central antitrust claims against Epic Systems Corp. to move forward, ruling that the healthcare software company must face allegations it used its dominance to suppress competition in the market for medical record “payer platforms.”

U.S. District Judge Naomi Reice Buchwald of the Southern District of New York found that rival Particle Health plausibly alleged Epic engaged in exclusionary conduct that harmed competition. According to the complaint, Epic blocked access to records for dozens of Particle’s customers, pressured clients to sever ties with the startup, and imposed delays on new users. Particle also accused Epic of damaging its reputation by raising concerns about its handling of patient data. In her decision, Judge Buchwald wrote that Epic’s alleged conduct was “sufficiently anticompetitive, and intended to exclude Particle from that market.”

The ruling allows Particle to pursue claims under Section 2 of the Sherman Antitrust Act, including monopolization, attempted monopolization, and monopoly leveraging. A state law claim for tortious interference with contract also survived, based on allegations that Epic induced healthcare analytics company XCures to end its agreement with Particle.

Other claims were dismissed. The court rejected allegations under Section 1 of the Sherman Act and New York’s Donnelly Act, finding no sufficient evidence of unlawful agreements with customers or industry groups. Judge Buchwald also dismissed claims for interference with prospective business relations, defamation, and trade libel, concluding that Particle failed to meet the required legal standards. In particular, she found Particle had not shown actual malice, which is necessary when alleged defamatory statements involve matters of public concern such as patient data security.

Epic, whose software stores health records for much of the U.S. population, denied any wrongdoing. The company said most of the cases had been dismissed and that it remains confident the surviving claims will not succeed. It has been argued that its actions were motivated by legitimate concerns about data misuse and privacy.

Particle, founded in 2018 and based in New York, entered the payer platform market in 2023. It contends Epic controls health data for as many as 94 percent of Americans and has abused that position to block competitors. Chief executive Jason Prestinario called the ruling a step forward, saying it preserved the company’s “core monopolization antitrust claims” and marked progress toward “better patient care and more patient control of their medical info.”

The case, Particle Health Inc. v. Epic Systems Corp., will now proceed to discovery, where the parties are expected to clarify the scope of the payer platform market and examine whether Epic’s conduct violated federal antitrust law.