Makers of Fortnite Win Antitrust Court Battle Against Google

Makers of Fortnite Win Antitrust Court Battle Against Google

On Monday, a jury concluded that Google breached antitrust laws by imposing fees and restricting competition from developers like Epic Games on its Play mobile app store. This pivotal ruling could potentially reshape the landscape for thousands of businesses reliant on Google’s Android operating system, revolutionizing how they generate revenue.

Following over three hours of deliberation, a federal jury unanimously favored Epic Games across all 11 aspects in a month-spanning trial, marking a significant milestone in their legal feud spanning three years.

In San Francisco, the jury’s decision underscored Google’s monopolistic grip on the smartphone app store realm and its engagement in anti-competitive practices detrimental to gaming giant Epic, the creator of the immensely popular game Fortnite.

The implications of this ruling could prompt Google to revise its Play Store policies, potentially allowing other entities to introduce competing app marketplaces and providing developers with greater flexibility to circumvent the commission charges imposed on in-app purchases.

Next year, Judge James Donato from the United States District Court for the Northern District of California will determine the necessary remedies to address Google’s actions. Google has expressed its intention to challenge the verdict by filing an appeal.

During the trial, Google’s legal team and executives consistently contended that they competed directly with Apple’s App Store, which holds greater popularity within the United States. Their argument centered on the notion that this popularity rendered the idea of an Android monopoly unfeasible.

The court’s decision marked a significant advancement in Epic’s long-standing endeavor to diminish the dominance wielded by Google and Apple over the mobile app landscape. This ruling arrived two years subsequent to Epic’s largely unsuccessful legal confrontation with Apple—a case that both parties are currently endeavoring to appeal to the U.S. Supreme Court. Notably, the prior verdict was determined by a judge.

Initiating the lawsuit against Google in 2020, Epic aimed to retain a larger share of the revenue derived from in-app purchases. Their objective included establishing an app store that could rival Google Play within the Android operating system.

Simultaneously contending with Epic’s allegations, Google found itself embroiled in yet another legal battle, this time defending against accusations of unlawfully upholding a monopoly in search and advertising. The Department of Justice and numerous states have brought forward these charges, marking a significant antitrust case that holds the potential to reshape the landscape of tech dominance upon its forthcoming verdict next year.

Within the Play Store, Google levies a 15 percent charge to app developers for customer payments concerning app subscriptions, while purchases within widely used apps sourced from the store incur fees of up to 30 percent. Google asserts that 99 percent of developers qualify for a 15 percent or lower fee on in-app purchases.

Following the verdict, Google intends to appeal while affirming its commitment to safeguarding the Android business model, as stated by Wilson White, a Google vice president of government affairs. He emphasized the intense competition with Apple’s App Store, as well as other app platforms on Android devices and gaming consoles, highlighted during the trial.

Reacting to the ruling, Epic stated in a blog post that it signifies a victory for app developers and consumers globally. They claimed the verdict demonstrated Google’s illicit app store practices, citing exploitation of their monopoly to enforce excessive fees, stifle competition, and impede innovation.

Tim Sweeney, Epic’s CEO, took to X (formerly known as Twitter) and posted “Free Fortnite!” following the verdict.

Epic triggered the conflict with Google by enabling customers to make in-app purchases directly through Epic, sidestepping Google’s platform and breaching its regulations. Google promptly banned Fortnite, prompting Epic to retaliate by filing a lawsuit.

The jury’s verdict pinpointed Google’s breach of antitrust laws in both the Android Play Store and the Android in-app billing system. Additionally, it highlighted Google’s deliberate upholding of monopoly power, enabling the imposition of unjust constraints on competitors within the market.

One particular concern for the jury was Google’s actions regarding Project Hug, where the company sought to incentivize prominent developers to remain within the Play Store. Epic’s legal team depicted these actions as “bribes” offered to significant app creators, a claim that Google vehemently refuted.

“According to Paul Swanson, an antitrust lawyer at Holland & Hard, the resounding verdict will significantly challenge Google’s defense during post-trial proceedings and any subsequent appeals. Swanson mentioned that the district court proceedings might conclude within a few months, while Google’s appeal to the U.S. Court of Appeals for the Ninth Circuit could span 12 to 18 months.

The jury additionally criticized Google’s arrangements with Android phone manufacturers such as Samsung, highlighting the imposition of obligations to pre-install Google applications and adhere to specific regulations.”

In the courtroom, Epic’s legal team highlighted Google’s deletion of certain internal chat messages, suggesting their potential relevance to the case. This action significantly undermined Google’s credibility, noted Mr. Swanson. He emphasized that Google’s apprehension stemmed from the fear that a jury, after scrutinizing weeks of examination, might question their trustworthiness. “The undeniable truth emerged as Google found itself confronting its consumers within the judicial arena,” remarked Mr. Swanson.