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Google loses antitrust lawsuit to Fortnite creator Epic Games
The News
Google has lost an antitrust case which argued that it illegally suppresses competition in its Play Store.
The suit, launched by Fortnite creator Epic Games three years ago, claimed that the Play Store operated as a monopoly which pulled in billions of dollars in revenue annually for the tech giant. Google collects a 15% to 30% commission on apps purchased from the Play Store, and developers pay substantial fees to the company to offer their apps to Android users.
Epic Games previously sued Apple, alleging the same monopolistic practices in the App Store. The game developer lost that case.
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Google struck secret deals
Google struck deals with developers and smartphone makers in an attempt to restrict competition, the case revealed. One such deal with Spotify allowed the music-streaming service to pay a 0% commission if users purchased a subscription through the app directly. If users opted to pay through Google, they paid 4%, a significant reduction from the typical 15% fee Google typically asked for. Google argued that the deals were necessary to ensure people used Android devices. The company viewed Epic’s lawsuit as an existential threat: “Google internally saw Epic Games as a ‘contagion’ that would infect Android’s biggest game and app developers,” The Verge noted.
Google’s other lawsuits are in trouble
Google is facing several antitrust lawsuits — and its loss in court on Monday could derail the others, antitrust expert Matt Stoller wrote in his newsletter BIG. Such decisions tend to have a “bandwagon effect,” Stoller noted. Judges often fear setting a precedent, but won’t need to now that a jury has moved in favor of Epic. The verdict shows that “big tech is not above the law,” Stoller added. “I hear a lot from skeptics that the fix is in, that the powerful will always win … But that just isn’t true. A jury of our peers just made that clear.”
Billion-dollar app industry threatened
The nearly $200 billion empire the two tech giants have forged from app purchases could now topple, as companies seek to de-risk after the trial’s findings. “The immediate aftereffect is we will see a shift in the marketplace where big tech companies will have to make accommodations … to stave off legal exposure,” technology and antitrust lawyer Paul Swanson told Bloomberg. Consumers believe that Big Tech have grown too large in recent years, and the jury’s decision offers concrete evidence of the growing mistrust of tech firms, Bloomberg noted. Both companies are now likely to make changes to their operating procedures in the face of mounting public pressure — something Epic Games CEO Tim Sweeney sees as a win for consumers.
