US Court Rules in Favor of Epic Games in Antitrust Suit Against Google
KEY HIGHLIGHTS
- Epic Games Wins Antitrust Trial: Epic Games, creator of Fortnite, triumphs in a California trial against Google, alleging anticompetitive practices in shielding its Play Store from competition.
- Alleged Abuse of Power: Epic Games accused Google of abusing its power, hindering competition in the Play Store to safeguard a lucrative system generating billions annually.
- 30% Fee Challenge: The lawsuit contested Google’s imposition of a 30% fee on developers for in-app sales, echoing concerns raised in the tech industry about app store commission rates.
- Unanimous Jury Verdict: After a concise three-hour deliberation, the nine-person jury delivers a unanimous verdict against Google, concluding a four-week trial focused on antitrust issues.
- Bright Light on Google’s Practices: Epic Games’ lawyer highlights Google’s alleged actions to impede competition, emphasizing that Google “systematically blocks” other app stores on its Play Store.
- Upcoming Judicial Action: Despite Google’s denial of wrongdoing, the judge now has the task of deciding the consequences and potential remedies for Google’s practices, with hearings scheduled for the second week of January.
Epic Games Wins Antitrust Trial Against Google
Epic Games, the creator of Fortnite, achieved a significant legal victory on Monday as a US jury ruled in their favor against Google. The decision concluded that Google, through its Android Play Store, holds an illegal monopoly, marking a rare setback for Google in the legal arena.
In 2020, Epic Games filed lawsuits against both Google and Apple, alleging that these tech giants were exploiting their control over their respective app stores, which sell apps and digital content for mobile devices. The crux of the matter lies in the companies’ practice of taking a percentage from all financial transactions on their app platforms, leading developers to criticize what they perceive as an unjust “tax.”
This courtroom defeat for Google, a standout occurrence in recent US tech legal battles, took merely a few hours for the San Francisco jury to decide. The verdict highlighted Google’s adoption of various illegal tactics to maintain a monopoly over its app store on Android phones.
Epic CEO Tim Sweeney celebrated the outcome, stating, “Victory over Google! After four weeks of detailed court testimony, the California jury found against the Google Play monopoly on all counts,” on the social media platform X.
The next step in the legal process involves the judge determining how to address the harm identified by the jury. This decision could potentially open up the Android operating system to competition from other app stores. However, Google has announced its intention to appeal the ruling, suggesting that the legal proceedings might extend over months or even years.
Google Defends Android Model Despite Legal Setback
Google’s vice president for government affairs & public policy, Wilson White, expressed the company’s commitment to defending the Android business model despite the setback. Phones operating on the Android system command approximately 70 percent of the global smartphone market.
During the trial, evidence emerged of Google employing aggressive tactics to ensure that the Google Play app store remained the sole avenue for third-party apps’ payments, including those for games like Fortnite. A significant portion of app store revenue is derived from video games, and Epic Games has consistently sought alternative payment methods outside of the Google and Apple app stores, which impose commissions as high as 30 percent.
Notably, Epic faced a less favorable outcome in a similar case against Apple, where a US judge predominantly sided with the iPhone manufacturer. Both Apple and Google contend that their app store commissions are industry-standard and provide benefits such as market reach, transaction security, and malware prevention.
The trial also revealed that Google generates substantial revenue, amounting to tens of billions of dollars, through its app store. Google’s practice of financially incentivizing smartphone manufacturers to keep the Play store as the exclusive gateway was described by Epic’s lawyers as a “bribe and block” strategy.
This legal battle mirrors Google’s ongoing federal case in Washington, where the US Justice Department accuses the company of engaging in illegal activities to preserve the dominance of its leading search engine. At the core of the search case are Google’s revenue-sharing deals, in which smartphone manufacturers, including Apple, receive a significant share of Google’s ad revenue. The outcome of this separate case is expected to be decided late next year.
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Source(s): The Street Journal
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