A federal jury in San Francisco ruled this Monday that Google violated antitrust laws with its Play Store mobile application stores. The ruling in favor of Epic Games, the company that created the popular game Fortnite, sets a momentous precedent because it points out Google’s anticompetitive practices by charging high commissions for adding products to its app store. The ruling concludes that these practices harm the income of the developers of these products and negatively affect users, who pay more for their downloads.
The litigation goes back a long way. Epic Games began this legal battle 3 years ago, when Google decided to follow Apple’s example and removed Fortnite from its Play Store upon discovering that Epic Games had secretly installed its own payment system to avoid the high commissions of both app stores. Two years later, and with several disputes involved, Fortnite was again available on Android and Apple phones although it did so ‘through the back door’: it still did not have its own application and worked through the Nvidia streaming platform.
The verdict, reached unanimously after three hours of deliberation, could have a significant impact on the app store industry and redefine the rights of software companies. Google’s Play Store generates billions of dollars in annual revenue through commissions of up to 30% that it charges to those who want to make their apps available to users through the electronic store.
Epic Games’ indictment alleges that Google acts in an anti-competitive manner by imposing restrictive conditions and excessive commissions on developers who use its platform. Early next year, Judge James Donato is expected to decide how he resolves the situation. This could open the door for other app stores to access the Google-run system, challenging its current dominance in the market.
At trial, Gary Bornstein, a lawyer for Epic Games, described Google as a corporation that encourages “bribery” and blocks competition in the Play Store. Google’s defense argued that its position was not anti-competitive, since it faces the closed system of the App Store, exclusive of Apple devices.
The jury’s decision could have implications beyond this case, as it highlights growing regulatory attention on Big Tech’s antitrust practices. Google also faces another antitrust case in Washington, accused of abusing its position as an Internet search engine.
Despite attempts to reach an agreement between Sundar Pichai, CEO of Google, and Tim Sweeney, CEO of Epic Games, the dispute reached court, evidencing the tensions in the app store industry and the search for a balance between interests of platforms and developers. Sweeney celebrated the decision in a message on Twitter: Victory over Google! Thank you for everyone’s support and faith! Free Fortnite!
The ruling highlights the relevance of court decisions in regulating the business practices of Big Tech and raises questions about the future of app stores in a market that is experiencing increasing regulatory attention.