An astonishing legal triumph by Epic Games Inc., the developer of Fortnite, has the potential to overturn the multibillion-dollar app-store industry. This landmark case is expected to escalate into a legal battle that will eventually reach the U.S. Supreme Court.
Epic Games’ decisive win in its highly publicized antitrust trial against Google has sent shockwaves throughout the software industry. For years, developers, led by Epic, have alleged that they were subjected to the whims of Google and Apple, who commanded steep commission fees of up to 30% on digital goods and services sold exclusively through their online stores.
According to a blog post by Epic Games, the jury’s verdict on Monday unequivocally proves that “Google’s app store practices are illegal” and that the tech giant abuses its monopoly power by imposing exorbitant fees, stifling competition, and hindering innovation.
Legal experts predict that this swift decision by a nine-person jury in San Francisco will disrupt highly profitable business sectors not only for Google but also for Apple, Sony Group Corp., Samsung Electronics, and others.
Michael Santoro, an ethics professor at the Leavey School of Business at Santa Clara University, points out that this verdict demonstrates how technology advancements are reshaping the definition of a market. Santoro emphasizes that the jury considered the Android app-distribution market as the relevant market, rather than including Apple’s app-distribution market.
While this ruling is expected to bring about certain changes in practices, tech attorney Abiel Garcia believes that it may not completely redefine the concept of app stores. He suggests that one possible outcome could be increased collaboration between app stores to establish consistent terms of agreement with developers, including commission fees and other regulations.
Meanwhile, developers are eagerly awaiting further clarity on how this court victory will impact their opportunities in the industry. U.S. District Judge James Donato is set to determine the scope of remedies that Epic will be granted in January, although the company did not seek monetary damages.
Google Plans to Appeal Epic Ruling, Continuing Legal Battle
Google has announced that it will be appealing the recent ruling in the Epic Games lawsuit, initiating what could be a lengthy legal process that may ultimately reach the Supreme Court. The trial highlighted Google’s fierce competition with Apple and other app stores on Android devices and gaming consoles. Wilson White, Vice President of Government Affairs and Public Policy for Google, expressed the company’s commitment to defending the Android business model and serving its users, partners, and the wider Android ecosystem.
Similar to Epic’s lawsuit against Apple, the Google case is expected to navigate through the appeals court system. Legal experts explain that this case is just one of many working their way through the appeals process. Notably, Apple emerged mostly victorious in its legal battle with Epic in 2021, winning nine out of ten claims. However, Apple did face some setbacks as a federal judge ruled against its anti-steering policies and prevented the company from blocking developers from informing users about alternative payment systems within apps. Both Apple and Epic have requested that the United States Supreme Court review this ruling.
In addition to preparing its appeal in response to the Epic ruling, Google is also awaiting the conclusion of the Justice Department’s antitrust case against its dominant search-engine business. The government’s case centers on Google’s alleged monopolistic practices in search and search advertising and how these practices have harmed consumers and advertisers. One of the most concerning tactics mentioned in the case is that Google has reportedly spent billions of dollars, including $26.3 billion in 2021 alone, to maintain its search-engine monopoly on mobile and web browsers. It has also been disclosed that Google pays over $10 billion annually to platforms like Apple.
As Google faces these legal challenges, it remains steadfast in its determination to defend its business model and ensure continued innovation within the Android ecosystem.