14 December 2023

Google loses Epic lawsuit

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Google has been unsuccessful in the lawsuit brought by Fortnite maker Epic Games against Google. The jury has ruled that Google has a monopoly in the app store, and that this is against the law. According to the jury, the company has also applied anti-competitive measures in the distribution of Android apps and in-app billing services.

Epic wants more freedom in the download stores. The game developer decided to launch a version of Fortnite that bypasses the app stores of the two tech giants, after which the app was removed from the download stores. Epic then filed lawsuits against Apple and Google three years ago.
It is striking that Epic largely lost its battle against Apple two years ago because the judge then decided that the dispute had nothing to do with apps.

Epic vs. Google

But Epic's case against Google is about something completely different. This case revolved around secret revenue-sharing agreements between Google, smartphone makers and major game developers, in which Google used its (illegal) monopoly position to thwart competitors. Moreover, the ruling was made by a jury, unlike the Apple case, where a judge ruled.

Epic has not sought damages; it wants every app developer to have complete freedom to use its own app stores and its own billing systems, and we don't yet know how or even if the courts might grant these wishes.
The judge will not conduct additional investigation into possible other creative solutions by Google that have the same goal as Epic wanted. He also does not indicate what percentage Google should charge for its products. Epic now has to pay a percentage of sales (15 to 30 percent) in both Google's Play Store and Apple's App Store. And Epic's CEO suggested that Epic could make hundreds of millions or even billions of dollars if it didn't have to pay Google's fee.

Possible consequences

The ruling could have major consequences for the future of Google's app store. The app store accounts for about a seventh of Google's revenue.
Google will appeal the verdict. It says that there are indeed alternatives; in the form of Apple's App Store, alternative download stores and gaming consoles.
In the EU, people have already taken a step further, next year the Digital Markets Act will come into effect, which obliges tech companies to allow other download stores and cash register systems.

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