FILE – A Google sign appears above the entrance to the company’s new building in New York on Sept. 6, 2023. A federal court jury decided that Google’s Android app store was protected by anticompetitive barriers that hurt smartphone consumers and software developers. Which deals a blow to a major pillar of the technology empire. (AP Photo/Peter Morgan, File)
Google has lost an antitrust lawsuit over barriers to its Android app store, with a federal court jury deciding that the company’s payments system was anticompetitive and hurt smartphone consumers and software developers.
It’s a blow to a key pillar of Google’s technology empire. But it’s a win for Epic Games, the maker of the popular video game Fortnite that brought the lawsuit, analysts say, for the broader game developer community.
Below are some questions and answers about the meaning of the ruling.
Didn’t Apple win a similar case?
In fact, Apple won a similar case brought by Epic against the iPhone App Store. But the 2021 trial was decided by a federal judge in a ruling currently on appeal at the U.S. Supreme Court.
The nine-person jury in the Play Store case seemed to see things through a different lens, even though Google technically allows Android apps to be downloaded from different stores — an option that Apple blocks on the iPhone.
Why did EPIC file a lawsuit?
Epic sued Google three years ago, alleging that the internet search giant was abusing its power to shield its Play Store from competition in order to protect a gold mine that generates billions of dollars annually. Just as Apple does with its iPhone App Store, Google collects a 15% to 30% commission on digital transactions completed within apps.
How did you lose to Google?
The jury reached its decision after just three hours of deliberation after hearing two hours of closing arguments from attorneys on opposing sides of the case.
They sided with Epic, whose lawyers portrayed Google as a ruthless bully deploying a “bribery and ban” strategy to discourage competition against the Play Store for Android apps. Epic attorney Gary Bornstein said Google makes it too burdensome or worrying for consumers to download Android apps from distribution outlets other than the Play Store.
“Google is making it difficult to put a competitor on the (Android) phone,” Bornstein said. “If the competition were a race, it would be as if Google had to run on a nice smooth track and everyone else had to run on quicksand.”
In the original lawsuit, Epic said Google “prevents app distributors from providing Android users with convenient access to competing app stores.”
Epic said in its complaint that if it were not for Google’s “anti-competitive” behavior, Android users “would have been able to download apps freely from developer sites, rather than through the App Store, just as they might do on a personal computer.”
Technically, it’s possible to download apps from outside the Google Play Store, but Epic has argued that this is too cumbersome for most people, requiring up to 16 steps, for example, to download Fortnite. For those who try, Google sends out “dire warnings that scare most consumers into abandoning the long process.”
Meanwhile, Google’s lawyers attacked Epic as a self-interested game maker trying to use the courts to save itself money while undermining the ecosystem that has produced billions of Android smartphones to compete against Apple and its iPhone.
The approach to the David vs. Goliath saga seemed to have won over the jury. The key witness, Google CEO Sundar Pichai, sometimes sounded like a professor explaining complex topics while standing behind the podium due to a health issue. Meanwhile, Epic CEO Timothy Sweeney portrayed himself as a video game enthusiast on a mission to take down the greedy tech giant.
what happened after that?
Google sought to avoid a jury trial, but US District Judge James Donato rejected its request. Now, Donato will outline the steps Google will need to take to get rid of its illegal behavior in the Play Store. The judge indicated that he will hold hearings on this issue during the second week of January.
Google said it would appeal the decision. But Wedbush analyst Michael Pachter says the search giant faces an “uphill battle.” While the solutions Google should enact have yet to be determined, Butcher believes its competitors will focus on the fees the company charges developers in its store. In the Apple case, the judge barred the company from enforcing “anti-routing provisions,” Butcher said, meaning preventing developers from directing people toward third-party payment stores outside of Apple’s App Store. He added that while Apple’s in-store fees remain largely unopposed, “the anti-routing ban has led to a slow creep of traffic toward direct-to-consumer transactions.” Apple is still appealing the decision.
“We expect Apple to eventually lose its appeal,” Butcher said. “However, Google’s loss allows for direct store competition within its Android platform, and we believe this will likely lead to lower platform fees over the next several years.”
What does the ruling mean for Google?
Depending on how the judge implements the jury’s verdict, Google could lose billions of dollars in annual profits generated from Play Store commissions. But the company’s main source of revenue — digital advertising mostly tied to its search engine, Gmail and other services — will not be directly affected by the outcome of the trial.
The recent epic win in the antitrust lawsuit against the Play Store has significant implications for Google and its dominance in the app distribution market. This ruling signifies a major blow to Google’s monopoly power and could potentially lead to major changes in the way it operates its app store. With the court finding that Google’s policies and fees were anticompetitive, this could pave the way for increased competition and innovation within the app distribution industry. Additionally, this ruling could also set a precedent for other similar lawsuits and potentially lead to further scrutiny of Google’s business practices. Overall, this is a landmark victory for Epic and could have far-reaching consequences for Google’s market dominance.