After months of waiting, Fortnite developer Epic Games has finally received a court date for its long-anticipated antitrust case against Google. A Northern District of California judge recently set Nov. 6 as the start date for the jury trial.
Dating back to August 2020, when Epic Games first filed suit against Google after it removed fan favorite Fortnite from its Google Play Store for directing customers to use an alternative in-app payment system, the case has since expanded to include a separate lawsuit against Google featuring dating app giant Match Group and its allegation that Google charges unfair store fees. Other accusations include that Google has participated in anticompetitive behavior by abusing its control of Android app distribution through its Play Store’s terms and conditions.
The case bears striking resemblance to Epic Games’s lawsuit against Apple, in which it alleged that Apple operated as a monopoly, charged exorbitant store fees and unfairly removed Fortnite from its app store for offering users alternative payment options in violation of its terms and conditions. That resemblance should concern Epic Games because, in a 2021 ruling, Judge Yvonne Gonzalez Rogers found that it couldn’t be reasonably concluded that Apple acted as a “monopolist under either federal or state antitrust laws.” In addition, while recognizing Apple’s large market share of digital mobile gaming transactions, Judge Gonzalez Rogers found that this fact alone was not enough to demonstrate “antitrust conduct” because “success is not illegal.” The resulting verdict saw Epic Games lose 9 out of 10 counts against Apple.
While the ruling did require Apple to allow outside links that could direct users to alternative payment systems, Apple didn’t have to allow payment processing inside the App Store. In addition, the company could continue requiring users to buy or download apps exclusively in the App Store. Apple would also be permitted to continue charging fees on developers for any in-store purchases.
Considering that many of the allegations Epic Games made against Apple are comparable to those it’s now making against Google, it wouldn’t at all be surprising if the outcome of the November trial produced a similar outcome.
As it did in the Apple case, Epic Games alleges that Google levies an unfair store fee that makes it difficult for developers to compete in the market. However, as seen in the Apple ruling, companies are permitted to take a percentage of the profits that a developer makes in the sale of its product. The 30 percent fee that Apple collects on purchases is not at all unusual.
According to a report by IGN, a 30 percent fee is the industry standard across computers, consoles and mobile platforms. These fees, Apple has argued, reflect the value of using its app store to obtain free “technology, tools, software for app development and testing, marketing efforts, platinum-level customer service, and distribution of developers’ apps and digital content.” Even so, Google has chosen to reduce its Play Store commission rate from 30 percent to 15 percent for any small businesses’ first one million in annual revenue. According to Google, the vast majority of Android developers that “sell digital goods and services” will see a 50 percent reduction in their rates.
Epic Games also alleges that Google violated numerous provisions of the Sherman Anti-Trust Act of 1890, specifically relating to the “Unlawful Monopoly Maintenance” of Google’s Android distribution market and in-app processing, and “unreasonable restraints on trade.” These charges are nearly identical to those the gaming company made against Apple, and in that case, the court ruled in favor of Apple in all but one charge.
Of course, some differences exist between the Apple and Google cases. Unfortunately for Epic Games, many of these differences also appear to favor Google.
One notable example is the freedom of consumers to install software outside of the Google Play Store. Unlike Apple, which requires all users of iOS devices to buy or download a game in the App Store, Google provide users of Android products with a sideloading option that effectively bypasses its Play Store. While utilizing this option is obviously more difficult than downloading an app through the Google Play Store, consumers do have an opportunity that doesn’t exist for users of iOS devices.
Google has also made several concessions that render some of Epic Games’ allegations less convincing. For instance, Google recently announced it was expanding a pilot program for its Play Store that will provide users with the option of selecting an alternative payment method to its in-app purchasing system. The pilot program was previously limited to just a handful of developers like Spotify and was noticeably absent from the U.S. market. However, this is no longer the case. Positive feedback from early users has prompted Google to expand its pilot program to the U.S. and other developers like Bumble, expanding user choice.
None of these facts mean for certain that Google will come out of the upcoming trial unscathed. It very well might not. However, before anyone is tempted to join the public pile-on directed at Google, they ought to consider the facts of the case and its notable similarities and differences relative to the Apple case. Consumers will be better off for it.