Explained | Google’s legal defeat against Epic: Why 2024 could be worst year for US tech giant  

A jury in San Francisco on Monday (Dec 11) found that Google struck some deals that stifled competition for its Play mobile app store, while violating California and federal antitrust laws.

The verdict came in the Epic vs Google case, where the Fortnite-maker company had accused the tech giant of restricting smartphone makers, wireless carriers, and app developers from providing any competition to the Play Store.

It is to be noted that a whopping 95 per cent of total mobile phone app downloads come from Google Play within the US.

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Google has denied any wrongdoing and has announced its intention to appeal the decision.

Epic’s lawsuit

Epic Games in its 2020 lawsuit alleged that Google struck deals with smartphone makers such as LG and Samsung to pin its app store on home screens, in return for a cut of Google’s profits.

It also said that the tech giant abused its powers to charge excessive fees from app developers, citing Google’s massive operating profit of $12 billion in 2021 alone from Play Store.

Epic wanted to devise an alternative billing mechanism that bypassed Play’s billing regime, to which Google had raised objections. The tensions between the two sides resulted in the removal of Fortnite game from both Google and Apple app stores.

Chief executive Sundar Pichai testified at the trial last month, where he defended Google’s actions.

Google’s argument

Google says its sole aim is to provide a safe and attractive experience to users, especially as it faced competition from Apple, its iPhone, and its App Store.

Now, it will appeal the decision, as declared by Wilson White, a Google vice president of government affairs and public policy.

“We plan to challenge the verdict.”

“We will continue to defend the Android business model and remain deeply committed to our users, partners, and the broader Android ecosystem,” he said.

Epic hails the decision

Epic hailed the decision as a major victory for app developers.

Epic Games said, “Today’s verdict is a win for all app developers and consumers around the world. It proves that Google’s app store practices are illegal and they abuse their monopoly to extract exorbitant fees, stifle competition and reduce innovation.”

It also called on the governments to take note of the judgment and make regulations to limit the overreach of tech giants.

Epic Games Chief Executive Tim Sweeney was quoted by Financial Times as saying: "To me, that’s the antitrust elephant in the room — that they all charge the same rate because they all have no competition. I think 30 per cent’s days are numbered."

Epic’s unsuccessful campaign against Apple

For Epic, the victory comes as a major relief, just two years after it lost a similar fight against Apple when Judge Yvonne Gonzalez Rogers decided that the fight had nothing to do with apps.

The judge ruled that all of Apple’s app store practices were justified—except for one—that Epic viewed as anti-competitive. Apple still has not had to comply as it awaits the Supreme Court’s decision early next year about whether to review the case.

What distinguishes Google from Apple in this case is that Google doesn’t control hardware that uses its operating system.

Instead, it licenses it to other companies through contracts that were the focus of Epic’s case.

What next?

The case will now move to the remedy stage where a judge will decide what changes Google must make for course correction.

Both parties will meet with Judge James Donato, in the second week of January to discuss potential remedies.

As expected, users of Google-powered smartphones might start seeing more app stores to download apps from if it is forced to make way for its rivals.

Also, it could be forced to share a bigger portion of the sales revenue to app developers.

But it is to be noted that any appeal by Google might further delay these changes.

Google’s billing regime

Google mandates app developers to use its Play Store for all in-app billings, also requiring them to pay up to 30 per cent of the total sales as fees.

This has long triggered an outcry from app developers, who allege that these prices are unjustified and are designed to maximise Google’s profits.

Not just that, Google has also faced allegations that it had struck deals with network operators such as AT&T and T-Mobile, and game developers like Activision Blizzard, paying them off to prevent them from launching Play Store rivals.

More bad news for Google in 2024

Further bad news for Google might come in mid-2024 as US district judge Amit Mehta in Washington, DC, is expected to issue his ruling on whether Google has unlawfully maintained its monopoly over web search.

(With inputs from agencies)