Google defeated in Epic antitrust battle

Fortnite maker Epic Games has prevailed in its high-profile antitrust trial against Google, which alleged the Play app store operated as an illegal monopoly, in a ruling that, if it holds, could up-end the entire app store economy.

Jurors found for Epic on all counts, a court filing showed, after more than a month of trial in Epic’s lawsuit, which accused Google of taking action to quash competitors and charge unduly high fees of up to 30% to app developers. The court in January will begin work on what remedies to implement.

The ruling marks a stunning defeat for Google, which alongside Apple operates one of the world’s largest app stores. If the ruling holds, it has the potential to give developers more sway over how their apps are distributed and how they profit off them.

Google said it would appeal. “We will continue to defend the Android business model and remain deeply committed to our users, partners and the broader Android ecosystem,” Wilson White, vice president of government affairs and public policy at Google, said in an e-mailed statement.

Epic CEO Tim Sweeney on Monday cheered the ruling on social media site X, calling out “the Google Play monopoly”.

Lawyers for the two companies made their final arguments on Monday morning and the federal judge handed the case to the jury less than four hours earlier, with instructions that a decision must be unanimous.

Among Epic’s allegations were that Google illegally ties together its Play store and billing service, meaning developers were required to use both to have their apps included in the store.

More app stores

While the Play store represents a much smaller chunk of Google’s revenue compared to its massively profitable search business, it is symbolically important as the central gatekeeper to billions of mobile phones and tablets.

Google may be compelled to allow for more app stores on Android-powered devices and lose revenue from the cut it takes out of in-app purchases.

“[Today’s verdict] proves that Google’s app store practices are illegal and they abuse their monopoly to extract exorbitant fees, stifle competition and reduce innovation,” Epic said in a statement on its website.

Read: For Google, dominating in Android app stores was ‘existential’

“The trial has shone a very bright light on what Google has done to impair the competition,” a lawyer for Epic, Gary Bornstein, told jurors earlier in the day, adding Google “systematically blocks” alternative app stores on the company’s Play store.

Among the more sensational allegations were that Google had a system for deleting texts and internal messages for the purpose of concealing its anticompetitive behaviour. An attorney for Epic instructed jurors on Monday that they could assume the content of the deleted messages was pertinent to the case and “would have been unfavourable to Google”.

Google has denied wrongdoing, arguing that it competes “intensely on price, quality and security” against Apple’s App Store.

A lawyer for Google, Jonathan Kravis, told jurors that “Google does not want to lose 60 million Android users to Apple every year”. Google lowered its fee structure to compete with Apple, Kravis said. “This is not the behaviour of a monopolist,” he said.

Google settled related claims from dating app maker Match before the trial started. The tech giant also settled related antitrust claims by US states and consumers under terms that have not been made public.

Epic lodged a similar antitrust case against Apple in 2020, but a US judge largely ruled in favour of Apple in September 2021.

Read: App stores must give prominence to SA developers: CompCom

Epic has asked the US supreme court to revive key claims in the Apple case, and Apple is fighting part of a ruling for Epic that would require changes to App Store rules.

Epic purposefully violated Play store rules by skirting its billing systems allowing for customers to make in-app purchases directly with Epic, an attorney for the game maker said on Monday. As a result, Google banned Fortnite and Epic filed its suit in response.  — Mike Scarcella, Greg Bensinger and Peter Henderson, (c) 2023 Reuters

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