A jury has deemed tech giant Google guilty of transforming its Google Play Store and Google Play Billing service into an unlawful monopoly.
The jury delivered its verdict on Dec. 11, affirming the search engine giant's monopolistic control in app distribution and in-app billing services on the Android platform – itself a Google creation. According to jurors, Google's practices stifled competition and harmed Epic Games, the creator of the "Fortnite" game franchise.
The North Carolina-based Epic Games sued the California-based tech giant in the Epic v. Google lawsuit. The trial spanned over four weeks and included testimony from key executives, such as Google CEO Sundar Pichai and Epic Games CEO Tim Sweeney.
The jury found that Google unlawfully linked its Google Play Store with its Google Play Billing payment services and engaged in practices detrimental to competition. Such practices included distribution agreements, Project Hug initiatives with game developers, and contracts with original equipment manufacturers. (Related: A3P’s Mike Davis says Google’s control of online advertising is linchpin of Big Tech MONOPOLY.)
Epic's main contention focused on Google's alleged misuse of its dominant position in the Android ecosystem, particularly its imposition of a commission ranging from 15 percent to 30 percent on transactions within apps on the Play Store.
Meanwhile, Google defended itself by arguing that these fees were necessary to offset investments in developing the Android platform. The company pointed to other Android app stores, like Samsung's, as evidence of market competition.
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The jury's decision hinged on the definition of the smartphone app market. Epic claimed that Google's Play Store monopolizes the market, leading to higher prices and stifling innovation. Google argued for a competitive market, including Apple's iPhone app store and other Android alternatives.
The verdict has significant implications. Developers may be emboldened to challenge the status quo, potentially leading to increased competition and lower fees. Epic aims for greater freedom for app developers to employ their billing systems and establish their stores on Android.
The ruling could also attract more regulatory scrutiny globally, contributing to potential changes in how app stores and digital marketplaces operate.
Google is likely to appeal to protect its revenue stream, but the case sets a precedent that could encourage more legal challenges against app store policies. In a broader sense, this case may mark the beginning of a significant shift in the tech industry, influencing how tech companies wield their power and how they are regulated.
Google plans to appeal jury verdict
While the Google Play Store and Google Play Billing have been officially declared an unlawful monopoly, the specific changes or gains secured by Epic Games are yet to be determined. The next steps will be decided by Judge James Donato.
Compared to Apple, which faced fewer consequences in its Epic case due to the already existing variety of Play Store alternatives on Android, Google intends to appeal the decision.
Wilson White, Google's VP of government affairs and public policy, stated: "We plan to challenge the verdict. Android and Google Play provide more choice and openness than any other major mobile platform. 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."
On the other hand, Epic Games publicly celebrated its victory in a blog post: "Today's verdict is a win for all app developers and consumers around the world. It proves that Google's app store practices are illegal and they abuse their monopoly to extract exorbitant fees, stifle competition, and reduce innovation."
"Google imposes a 30 percent tax on developers simply because they have prevented any viable competitors from emerging to offer better deals. And Google executives acknowledged in court that their offer of a 26 percent rate on third-party payment options is a fake choice for developers."
Despite the likely appeal, the Epic v. Google verdict is considered a watershed moment, prompting reflection and potential changes in the landscape of tech monopolies.
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