Epic Games has achieved a rather sensational victory in its protracted legal battle against Google over its app store policies. The federal jury’s unanimous decision was delivered after an exhaustive month-long trial in San Francisco.
At the core of this landmark verdict is the assertion that Google has systematically entrenched itself as a monopoly in the app store market. The trial further unraveled Google’s alleged anticompetitive strategies, laying bare clandestine revenue-sharing agreements with smartphone manufacturers and influential game developers. Epic Games, for its part, argued that these covert dealings were orchestrated to stifle competition, ensuring the Play Store’s dominance as the default app distribution platform on Android devices.
Central to the jury’s scrutiny were the undisclosed agreements between Google and major game developers, including industry behemoths like Activision Blizzard. The jury’s examination unveiled a pattern of strategic manoeuvres by Google, discouraging potential rivals from establishing their own app stores. This, as argued by Epic Games, perpetuated an ecosystem where competitors were effectively deterred from challenging the established status quo. A critical finding by the jury revolves around the illegal tie between Google’s Play Store and its billing payment services.
“This is an example of the greatness of the American justice system. A billion dollar company challenges a trillion dollar company over complex antitrust practices, and a jury of 9 citizens hears the testimony and renders a verdict. And here it is in writing,” Tim Sweeney, CEO of Epic Games, wrote in a post on X.
The roots of this legal conundrum trace back three years when Epic Games embarked on a dual-front legal battle against two tech behemoths, Google and Apple. At the heart of Epic’s contention lay the assertion that both these giants, with their app store policies, stifled competition and imposed exorbitant fees on developers. And in 2020, the legal drama began with Epic Games challenging Apple’s app store policies, alleging antitrust violations. It accused the tech giant of monopolizing the Android app distribution market for over a decade. Epic contended that Google engaged in anticompetitive conduct through undisclosed revenue-sharing deals and strategic maneuvers to dissuade potential competitors from launching their own app stores.
The month-long trial continued to delve into the intricacies of Google’s dealings, spotlighting confidential agreements with prominent game developers like Activision Blizzard. Revelations emerged of Google’s financial inducements to discourage these developers from venturing into the realm of independent app stores, thereby solidifying Google Play’s dominance on Android devices. Central to the trial was the revelation of “Project Hug,” an alleged initiative where Google made lucrative payments to game developers, such as Activision Blizzard, to dissuade them from competing with the Play Store. Epic Games argued that Google’s actions not only restrained trade but also limited users’ options by making it challenging for them to download apps directly from the web.
In response to the verdict, Google has signaled its intent to contest the decision, maintaining that Android and Google Play epitomize unparalleled choice and openness. However, this ruling amplifies existing inquiries into Google’s overarching dominance. Against the backdrop of intensified global regulatory scrutiny, with initiatives such as the UK’s Digital Markets Act and the EU’s Digital Markets Act, Google finds itself navigating a landscape increasingly skeptical of unchecked tech influence. “The trial made clear that we compete fiercely with Apple and its App Store, as well as app stores on Android devices and gaming consoles. We will continue to defend the Android business model and remain deeply committed to our users, partners, and the broader Android ecosystem,” Wilson White, Google VP for Government Affairs and Public Policy, commented on the matter. Attention now turns to Judge James Donato, tasked with determining the remedies for Google’s conduct in early 2024.
