Federal jury says Google’s app store violated antitrust law

MoneyDec 12, 2023

Google’s app store practices violate US antitrust law and the search giant has illegally operated a monopoly in Android app distribution and in-app billing, a federal jury said Monday evening.

The verdict in a years-long battle between Epic Games — maker of the hit video game “Fortnite” — and the technology giant marks a significant victory for critics of Google’s app store terms and practices.

Epic and Google had sparred for weeks in a closely watched federal trial over everything from the fees Google charges for in-app purchases to Google’s contract terms that restrict competing app stores from Android devices.

The jury decision could represent a crack in the armor of app store operators, who for years have successfully defended their platforms from monopoly allegations by consumers, app makers and other critics of large technology companies.

“Victory over Google!” said Epic Games CEO Tim Sweeney in a post on X. “After 4 weeks of detailed court testimony, the California jury found against the Google Play monopoly on all counts.”

Google’s response

In a statement, Google said it would challenge the landmark verdict that could lead to sweeping changes to the company’s app store business.

“Android and Google Play provide more choice and openness than any other major mobile platform,” said Wilson White, vice president of government affairs and public policy at Google. “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. We will continue to defend the Android business model and remain deeply committed to our users, partners, and the broader Android ecosystem.”

With Monday’s verdict, a separate process in the case is expected to begin in the new year regarding possible remedies targeting Google’s app store, and could seek to change how Google collects its fees from developers or make it easier for Android devices to host third-party app stores.

For now, the outcome of the high-profile court battle stands in contrast to a similar case Epic has pursued against Apple over its app store. After being largely defeated on its most central allegations in the lower courts, Epic has appealed its case against Apple to the US Supreme Court.

A long-simmering fight

Epic’s challenge to app store operators followed years of criticism by app developers that Apple and Google impose unduly restrictive terms and exorbitant fees for the ability to appear on their app stores. Epic had acknowledged in both cases that it launched a deliberate campaign, known as Project Liberty, to violate the companies’ developer terms specifically to force a legal showdown by recommending in 2020 that Fortnite players purchase in-game currency from Epic’s website instead of through iOS or Android apps.

That encouragement led Apple and Google to remove Fortnite from their respective app stores, citing violations of app store policies, and triggered the legal battles.

Apple and Google have both maintained that their app store practices help ensure that software available through their platforms is safe and secure. In addition, Google has argued that the Android operating system, which it develops and licenses, allows users to download apps from any third-party source if they choose, whereas Apple restricts app installations to only those apps available from its proprietary app store.

Google has also accused Epic of trying to benefit from the visibility and reach that the Google Play Store provides without contributing to the platform’s upkeep.

US lawmakers have proposed legislation to address some of the criticisms raised by app developers, but failed to advance amid a torrent of criticism by Apple and Google.

On Monday, consumer advocates argued the jury verdict was a major victory “against one of Google’s most profitable monopolies.”

“This is a message that justice can prevail in the fight against Big Tech’s outsized power over our lives,” said Katherine Van Dyck, senior legal counsel at the American Economic Liberties Project, a consumer group advocating for aggressive antitrust enforcement.

Monday’s verdict may be part of a much broader shift in the internet economy, said Anil Dash, a longtime technology entrepreneur and commentator.

“The app stores are cracking open, walls between social media platforms are coming down as the old networks fail, the headlong rush to AI is making all the search engines worse, and the open web is more powerful than ever,” Dash wrote in a post on Threads. “We are about to see the biggest reshuffling of power on the internet in 20 years. Most users have never seen this kind of change.”


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