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February 27, 2024

Epic Games Wins Landmark Antitrust Lawsuit Against Google Over App Store Fees

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Dec 13, 2023

Epic Games, maker of the massively popular Fortnite game, has emerged victorious in a high-stakes antitrust trial against Google. A federal jury in San Francisco found on Monday that Google’s control over its Play Store app market on Android devices violates antitrust laws, siding with Epic’s claims that Google has an illegal monopoly over app distribution and payments on Android.

The landmark ruling represents a major blow to Google’s ironclad control over the Android ecosystem. Google may now be forced to overhaul its Play Store policies to enable more competition, providing a path for developers to avoid Google’s commissions of up to 30% on app sales and in-app purchases.

Background of the Lawsuit

Epic first sued Google in August 2020 over its Play Store fees and policies, after Google removed Fortnite from the Play Store when Epic introduced a direct payment option. Epic claimed that Google has a monopoly over Android app distribution that forces developers to use the Play Store and Google’s in-app payment system.

Over the course of the three-week trial, Epic argued that Android allows sideloading of apps, but made the case that Play Store distribution is an “essential facility” that developers need access to, as almost all Android apps are discovered and downloaded through the Play Store. Epic claimed that the commissions Google charges amount to illegally high fees enabled by its monopoly position.

Google countered that its cut of app transactions helps fund security measures and that Android supports competitors. But the jury ultimately sided with Epic’s claims.

Key Details of the Jury Verdict

Specifically, the jury unanimously agreed that:

  • Google holds monopoly power over Android app distribution in the relevant US market
  • Google unlawfully maintained this monopoly power through anticompetitive conduct
  • Google’s conduct violated California’s Unfair Competition Law
  • Google’s conduct harmed Epic Games

The jury awarded Epic no damages, as Epic had sought only declaratory and injunctive relief rather than monetary compensation. But the findings of illegal monopoly open Google up to major changes in how it runs the Play Store and Android platform.

Epic’s CEO Tim Sweeney hailed the ruling as “a huge win”:

“Today’s ruling is a huge win for fair competition between app platforms and a defining moment in the tech industry. It reinforces the open ecosystem model that has enabled startups from an Illinois dorm room and a Taiwanese garage to compete directly with mighty companies atop the industry. Every startup founder hopes for a level playing field to compete in the market; today that wish comes a step closer for app developers and consumers alike,” Sweeney said.

Meanwhile, a Google spokesperson said the company disagrees with the verdict and is considering appeal options while also evaluating changes to its Android and Play Store partnerships.

What Could Change After This Ruling

With the jury deciding Google illegally monopolizes Android app distribution and in-app payments, Google may now be forced to make concessions. Potential outcomes include:

  • Allowing alternative app stores on Android devices
  • Letting apps provide integrated payment systems to avoid Google’s commissions
  • Reducing Play Store commissions below 30%
  • Paying damages to Epic Games in a follow-up suit

The remedies will depend on the court’s injunction, which has yet to be decided. But if Google is compelled to open up Android and the Play Store more to rivals, it would fundamentally shift the competitive landscape for Android developers.

Competitors like Epic Games could potentially release game app stores for Android that offer lower commissions than Google’s 30% fee:

App Store Standard Commission Rate
Google Play Store 30%
Apple App Store 30%
Epic Games Store (PC) 12%

This could put major pressure on Google to reduce its Play Store commission rates to be more in line with Epic’s 12% fee on PC.

The ruling also sets the stage for Epic to revive Fortnite on Android, potentially through its own app store that bypasses Google’s payment system and fees. Currently, the only way to play Fortnite on Android is by sideloading the Epic Games app, which Google argues is “incredibly risky.”

If Google introduces new policies that allow alternative app stores, Fortnite would likely return to Android and other major developers may start evaluating their own app store options as well.

What This Means for the App Industry

Epic’s antitrust win has far-reaching implications across the app and gaming industries:

For app developers, the ruling provides ammunition to demand lower distribution fees from Google and potentially Apple as well on iOS. Smaller app makers have long argued that the 30% commission charged by the tech giants makes it hard for them to be profitable. More competition could force commission cuts, helping developers’ bottom lines.

For consumers, increased competition could translate to lower prices, as developers save on commissions. It may also lead to more quality app options on Android if innovative stores launch without being blocked by Google policies as Epic was.

For platforms like Apple’s iOS and Windows, there will be intensified pressure to lower their own commissions, as Android heads towards a more competitive, developer-friendly model. However, the ruling does not automatically apply to other platforms.

Major developers like Microsoft and Spotify have supported Epic’s suit against Google from the beginning. They will likely ramp up similar antitrust arguments, emboldened that Google’s monopoly has been found unlawful. More suits could follow targeting Apple and other dominant app stores specifically.

What’s Next in the Epic vs Google Legal Battle

While Epic prevailed on the central claims of anticompetitive conduct, the legal fight with Google is likely far from over:

  • The trial focused solely on Android and Google Play. Epic’s similar case against Apple for iOS practices is still pending and heading to trial in 2024 barring a settlement.

  • Injunction hearings will now follow to decide how Google must change its Play Store policies. Google and Epic will argue over remedies, which could take months to finalize.

  • If Google appeals part or all of the verdict, the case could be tied up in appeals court for years before reaching a final, legally enforceable outcome.

  • Additional damages lawsuits are likely in the future now that Google’s monopoly has been found illegal. Though Epic did not seek monetary relief in this first lawsuit, subsequent suits by Epic or other developers may demand Google pay back millions or billions of dollars. According to legal experts, Google faces significant financial liability from class action suits once the appeals finish.

In the meantime, Google may proactively open parts of Android and strike alternative deals with major developers to ward off growing antitrust pressure across the US, Europe and Australia. However, meaningful changes to Android’s competitive landscape are still likely years away pending appeals and injunctions.

For now, the ruling represents a symbolic blow to Google’s market power and a sign of hope for startups and developers who feel crushed by mobile platform gatekeepers. Only time will tell whether it ushers in a revolution in how apps are distributed and monetized across Google’s Android ecosystem and beyond.

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AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.

By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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