It’s game over for Google on app store monopoly

The legal battle, which began three years ago when Fortnite maker developed and installed its own payment system but got kicked off from Google and Apple app-stores, was settled by Monday’s verdict as the jury decided that Google Play holds an illegal app-store monopoly.

Epic Games had aimed to by-pass an ‘up to 30%’ of commission (also called revenue share) which the two tech giants charge software developers for in-app purchases and subscriptions on their platforms.

The verdict concluded that Google holds a monopoly power in the Android app distribution markets and in-app billing services markets. It further concluded that, Google committed anticompetitive behaviour in those markets, and that Epic Games was injured by that behaviour.

Jurors also decided that Google holds an illegal tie between its Google Play app-store and its Google Play billing payment services and that its distribution agreement, Project Hug, which deals with game developers and Original Equipment Manufacturers (OEMs) were all anticompetitive.

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

“Google was willing to pay billions of dollars to stifle alternative app stores by paying developers to abandon their own store efforts and direct distribution plans, and offering highly lucrative agreements with device manufacturers in exchange for excluding competing app stores.”

“These deals were meant to cement Google’s dominance as the only app store in town - and it worked. More than 95% of apps are distributed through the Play Store on Android.”

There is no surprise that Google plans to appeal against the verdict, as expected of Big Tech who never go down without a good fight. They argue that the court case highlighted that the company competes fiercely with Apple and their app-store.

Epic Games also took Apple to court in 2021 with regards to a separate but related case, though it was defeated by a judge ruling.

This article by Bloomberg, lays out the significant differences in these two cases. To sum up, it argues that evidence in this current case revealed Google had reached agreements with top game developers for smaller fees while Apple had applied its 30% rate evenly.

Many in the industry argue Monday’s verdict marks the beginning of a weakening app-store rules, adding to existing criticisms by regulators and law makers around the world.

The end of nearly $200 billion app-store industry is nigh.

The defeat, it has further been argued, will threaten to destroy an app-store duopoly held by Google and Apple in which the two tech giants generate close to $200 billion a year while dictating consumers how to use their mobile handsets.

In a 2021 article we wrote of the Apple vs Epic Games outcome hoping it would not be the end of dismantling corruption in the market, and it seems it wasn’t.

The jury verdict delivers a win for Epic Games right away, while remedies will be discussed with the judge and the two entities in the new year.