A federal court jury on Monday began deliberations in an antitrust trial focusing on whether Google’s efforts to leverage its own app store for Android smartphones illegally gouged consumers and stifled innovation.
SAN FRANCISCO – A federal court jury on Monday began deliberations in an antitrust trial focusing on whether Google’s efforts to leverage its own app store for Android smartphones illegally gouged consumers and stifled innovation.
Before the nine-person jury in San Francisco began evaluating evidence presented during the four-week trial, lawyers for opposing sides in the legal battle spent about two hours making their closing arguments in the lawsuit brought by Epic Games, the game’s maker. The famous video game Fortnite.
Epic lawyer Gary Bornstein portrayed Google as a ruthless bully deploying a “bribery and ban” strategy to discourage competition against the Play Store for Android apps. Google’s lawyer, Jonathan Kravis, 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.
Much of the dueling arguments between attorneys dealt with the testimony of a series of witnesses who came to court during the trial.
Key witnesses included Google CEO Sundar Pichai, who at times sounded like a professor explaining complex topics while standing behind a podium due to a health issue, and Epic CEO Tim Sweeney, who portrayed himself as a video game enthusiast on a mission to take down… People. Greedy tech giant. Pichai and Sweeney met for about an hour late last week in an unsuccessful attempt to reach a settlement before the case entered jury deliberations, according to court documents.
Epic has alleged that Google is using its wealth and control over the Android software that powers most of the world’s smartphones to protect a lucrative payment system within its Play Store to distribute Android apps. Just as Apple does with its iPhone App Store, Google collects a commission of 15% to 30% from digital transactions completed within apps – a setup that generates billions of dollars in revenue annually.
This commission system “has led to higher prices for developers and consumers, as well as decreased innovation and quality,” Bornstein said during his closing argument.
Google has strongly defended kickbacks as a way to help recoup more than $40 billion in money it spent building the Android software that it has been distributing since 2007 to manufacturers to compete against the iPhone.
Kravis emphasized in his closing argument that “Android phones cannot compete with the iPhone without a great app store on them. Competition between app stores is related to competition between phones.”
The jury’s ruling may depend largely on whether its market definition embraces Google’s argument about Apple being a competitor or whether it sticks to the much narrower competitive landscape drawn in the Epic case.
While Epic has been claiming that the Google Play Store is a virtual monopoly that drives up prices and discourages app makers from creating new products, Google has painted a picture of a broad, highly competitive market that includes Apple’s iPhone App Store as well as Android alternatives to the Android operating system. Its Play Store, although the operating systems running on Android phones and iPhones are not compatible,
“Apple is not the get-out-of-jail-free card that Google wants,” Bornstein told the jury on Monday.
But Kravis repeatedly insisted that more consumers would feel forced to buy iPhones if the Play Store didn’t provide a safe, trustworthy place to download Android apps.
“From the beginning, the competition between phones has also been about competition between app stores,” Kravis said of the competition that began in 2008.
Google also pointed to competing Android app stores like the one Samsung installs on its popular smartphones as evidence of a free market. In addition to competing app stores pre-installed on devices made by other companies, more than 60% of Android phones offer alternative ports for Android apps.
However, Epic has presented evidence confirming the idea that Google welcomes competition as an excuse, citing the hundreds of billions of dollars it has doled out to companies like game maker Activision Blizzard to discourage them from opening competing app stores. Besides making those payments, Bornstein also urged the jury to consider Google’s “horror screens” that pop up to warn consumers of potential security threats when they try to download Android apps from some Play Store alternatives.
“These are classic anticompetitive strategies that dominant companies use to protect their monopolies,” Bornstein said.
Google’s insistence on competing with Apple in app distribution despite the company’s reliance on incompatible mobile operating systems highlights the intimate relationship between the two companies in online search — the subject of another major antitrust trial in Washington that will be decided by international justice Court. A federal judge after hearing final arguments in May.
The Washington trial centers on allegations by the US Department of Justice that Google is abusing its dominance of the Internet search market, in part by paying billions of dollars to automatically answer queries placed on personal computers and mobile devices, including iPhones.
Epic’s lawsuit against Google’s Android app store mirrors another lawsuit the video game maker filed against Apple and its iPhone app store. Apple’s lawsuit led to a month-long trial in 2021 amid the pandemic, with Epic losing all of its major claims.
But Apple’s trial was set by a federal judge rather than a jury that would rule in the Google case.
The long-awaited antitrust trial against Google has finally reached its critical juncture, as the focus turns to the Android app store payments. Both sides have presented their arguments, and now the jury will be tasked with evaluating the evidence and reaching a verdict. This trial is significant as it could have far-reaching implications for Google’s control over its app store and the payments within it. As the trial enters this crucial phase, all eyes are on the jury to see how they will ultimately interpret the evidence presented to them.