Google Loses Monopoly Case to Epic Games: Fortnite Maker
In a landmark decision, the maker of the widely popular video game Fortnite, Epic Games, has secured a win against tech giant Google. The US court jury unanimously ruled that Google had been operating an illegal monopoly, specifically in relation to its app store.
The legal battle, initiated by Epic Games in 2020, accused Google of unfairly establishing dominance over rival app stores. The crux of the matter revolved around Google's Android software, which powers smartphones used by hundreds of millions worldwide.
Reacting to the verdict, Google expressed its intention to challenge the outcome. Wilson White, Vice President of Government Affairs and Public Policy at Google, emphasized that Android and Google Play offer more choice and openness than any other major mobile platform. He asserted, “We will continue to defend the Android business model and remain deeply committed to our users, partners, and the broader Android ecosystem.”
Epic Games CEO, Tim Sweeney announced that efforts to determine remedies would commence in January. In a celebratory post on X (formerly Twitter), Sweeney declared, “Victory over Google! After four weeks of detailed court testimony, the California jury found against the Google Play monopoly on all counts.”
The trial also challenged Google's imposition of transaction fees, reaching up to 30%, on Android app developers. Additionally, it scrutinized the bundling of Google's Play Store and billing service, requiring developers to utilize both for their apps to be featured in the store. The jury's decision holds significant implications, potentially granting developers more control over app distribution and revenue generation.
Google contends that its commissions are competitive within the industry, offering benefits such as broader reach, transaction security, and safeguards against malware. However, if the ruling stands, Google may be compelled to allow more app stores on Android devices, leading to a potential loss of revenue from in-app purchases.
The Google Play Store, a major player in the app market, competes directly with Apple's App Store. With Android powering approximately 70% of smartphones globally and over 95% of Android apps distributed through the Play Store, it represents a substantial platform for Google. While not as lucrative as Google's search business, the Play Store provides access to billions of mobile phones and tablets.
Epic Games argued in its lawsuit that Google engages in anti-competitive practices that stifle innovation and choice. The company claimed, “Over the course of the trial, we saw evidence that Google was willing to pay billions of dollars to stifle alternative app stores.” Epic also asserted that Google used lucrative agreements with device manufacturers to exclude competing app stores.
This legal battle adds to Google's list of antitrust cases, with the company settling similar claims with dating app Match prior to the Epic trial. Epic Games had previously filed a similar antitrust case against Apple in 2020, but a US judge largely ruled in favor of Apple in 2021.
In response to the verdict, Epic Games emphasized the need for legislation and regulations addressing the perceived strangleholds that Apple and Google exert over smartphones. The implications of this case are likely to reverberate through the tech industry, potentially shaping the future landscape of app distribution and competition.
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