June 13, 2024

Fortnite maker Epic Games’ antitrust trial win against Google has leveled up the fight to democratize app stores.

A nine-person jury concluded yesterday (Dec. 11) that Google’s Play Store operates as an illegal monopoly, unanimously answering “yes” to all 11 questions on the verdict form. The jurors said Google has monopoly power over the Android app distribution and billing services markets, in violation of antitrust laws “worldwide excluding China,” where it’s banned. They also agreed that Epic suffered as a result.

“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,” Epic shared in a blog post. The video game maker called for “legislation and regulations that address Apple and Google strangleholds over smartphones.”

This fight has gone beyond Google and Epic, though. “This may wind up being an enormous shake up,” predicted a guest on the forum run by startup incubator Y Combinator. The basic principles of Google’s app store economy have been called into question, setting the stage for an overhaul. Google may be forced to allow other companies to set up competing payment systems on the Play Store, among other things.

But first, Google will challenge the verdict, said Wilson White, vice president of government affairs and public policy at the Alphabet-owned company.

Google’s app store monopoly, by the digits

95%: Share of apps distributed via the Play Store on Android.

3%: How much Epic was saving from not using a payment processor, according to CEO Tim Sweeney’s testimony

$398,931.23: Fees Epic didn’t pay that Google would have received if the independent Epic transactions were instead processed through Google Play’s billing system 

4%: Commission that Spotify pays Google—much less than the typical 15%—as part of a secret deal. Google needs to be in the good books of the world’s largest music streaming platform

10%: The special discounted rate that Google offered Netflix, which refused. The video streaming giant doesn’t have an in-app purchase option on Android, so it no longer pays Google anything to distribute its app

Quotable: Google’s tight grip on its app store

“I want everybody to see and understand Google exercises de facto control over the availability of apps on Android.”

Epic Games CEO Tim Sweeney during his November testimony

A brief timeline of Epic Games versus Google

August 2018: Epic takes Fortnite off Google’s Play Store over the tech titan charging app developers a 30% fee for purchases made on the store. Unlike Apple’s iOS operating system, Android lets people to install apps directly from any source.

April 2020: Fortnite reluctantly returns to the Play Store. Epic CEO Sweeney says Google puts software downloaded outside the store at a “disadvantage,” accusing it of using “scary, repetitive security pop-ups” and other intimidation tactics to turn users away from third-party offerings.

Aug. 13, 2020: Epic adds a new direct payment option for in-game currency on mobile, which comes at a 20% discount compared to purchasing from Apple or Google’s app stores, because it “passes along payment processing savings to you.” Booted off both stores, Epic then sues Apple and Google.

September 2021: A federal judge rejects most of Epic’s arguments in its antitrust case against Apple. Later, in Google’s case, a nine-person jury—not a judge—will decide its fate.

September 2023: Google settles with a dozen US state attorneys general, who sued for similar reasons.

November 2023: Narrowing the scope of a courtroom fight, Google settles with Match Group, the online dating giant whose apps include Tinder, Hinge, and Match.

Dec 8. 2023: Google and Epic make a last-ditch attempt to settle their case, but no deal is reached.

Dec. 11, 2023: A jury rules that Google’s Play Store operates as an illegal monopoly.

One more thing: PhonePe’s challenge to Google in India

Walmart-owned digital payments firm PhonePe is launching a mobile app store with no fee on in-app purchases. App listings on the Indus Appstore will be free for the first year, followed by a “nominal” annual fee, PhonePe CEO Sameer Nigam said. Developers will be able to list apps in 12 Indian languages in addition to English, and integrate any payment gateway of their choice on the platform.

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