Title: Epic Games Triumphs in Antitrust Lawsuit Against Google: Implications for App Store Practices
In a significant legal development, a US jury delivered a verdict on Monday, declaring that Google’s current app store policies violate Sections 1 and 2 of the Sherman Antitrust Act and the California Cartwright Act. The decision followed an antitrust lawsuit filed in 2020 by Epic Games, the creators of the immensely popular game Fortnite, against Google, its parent company Alphabet Inc., and dating app company Match Group. The lawsuit alleged that Google’s app store, the Google Playstore, mandated game developers to utilize Google’s software for in-app purchases and subscriptions, consequently requiring developers to share a portion of their earnings with Google.
The roots of the legal battle can be traced back to the removal of Fortnite from both Google and Apple’s app stores. Both tech giants took this action in response to Fortnite allowing users to make in-app purchases through its website, thus bypassing the obligation to share profits with the app store providers. While Match Group settled with Google before the trial, making Epic Games the sole plaintiff, the recent jury decision favored Epic Games, marking a pivotal moment in the ongoing antitrust scrutiny faced by major app store platforms.
The jury ruled that Android’s app distribution market and in-app billing constituted antitrust markets. Furthermore, it found that Google engaged in monopolistic practices within these markets, unreasonably restraining trade. The verdict also acknowledged that Epic Games suffered harm due to Google’s monopolistic and anticompetitive practices. However, the specific penalty for Google’s violation is yet to be determined and will undergo a separate judicial process expected to commence within the coming year.
Epic Games celebrated the decision, characterizing it as a victory for app developers and consumers worldwide. In a statement, the company emphasized that the verdict exposed Google’s app store practices as illegal, alleging that the tech giant abused its monopoly power to impose exorbitant fees, stifle competition, and hinder innovation. In response to the verdict, Google defended its business model, asserting that Android and Google Play offer more choice and openness than any other major mobile platform. The tech giant reiterated its commitment to defending the Android business model and maintaining its dedication to users, partners, and the broader Android ecosystem.
This legal saga mirrors a similar case Epic Games pursued against Apple in 2021, where it lost on most counts. However, Epic Games appealed the judgment to the US Court of Appeals for the Ninth Circuit, which affirmed the majority of the lower court’s ruling. The case is currently making its way through the federal court system, with Epic Games seeking Supreme Court review.
The Google verdict adds to the growing list of antitrust cases targeting major app store platforms globally. In 2021, the Dutch Authority for Consumers and Markets (ACM) found that Apple’s commission policy on in-app purchases violated Dutch antitrust law. South Korea’s legislature also addressed the issue of whether Apple and Google should be entitled to a portion of in-app purchase profits in 2021. Additionally, in 2020, the European Commission’s Antitrust Division initiated an investigation into Apple’s app store policies concerning in-app purchases for music apps, notably including Spotify.
The legal battles between tech giants and app developers underscore the increasing scrutiny on app store practices worldwide. As these cases unfold, they may influence the regulatory landscape, potentially leading to reforms and changes in the way app store platforms operate. The outcomes could have far-reaching implications for the tech industry, shaping the future of app development, competition, and consumer protection.