Epic Games begins battle against Google
Epic alleges that Google's practices hinder competition, giving it an unfair and monopolistic advantage
In a high-stakes legal showdown, Epic Games, the creator of the widely popular video game Fortnite, has initiated its legal battle with Google.
The firm accuses Google of acting as a monopoly by charging a 30% commission on in-app purchases made through the Google Play store.
The trial, which commenced on Monday in San Francisco, adds to Google's ongoing antitrust woes, as the company simultaneously defends itself in a landmark case brought by the US Department of Justice in Washington DC.
The core of the Epic—Google trial revolves around Google's treatment of third-party mobile developers. Epic Games alleges that Google's practices hinder competition, leading to an unfair and monopolistic advantage in the app market.
The legal dispute originated from an incident in August 2020 when Epic implemented updates to Fortnite, enabling direct billing for in-app purchases, circumventing the app store's fees.
In response, Google, along with Apple, promptly removed Fortnite from their respective app stores, leading to Epic's legal action against both tech giants.
The lawsuit against Apple, which went to trial in 2021 and was appealed earlier this year, resulted in Epic losing on nine out of 10 counts.
However, a potential concession related to emailing customers remains pending, contingent on a Supreme Court decision regarding the case against Apple.
One notable difference between the Epic—Google case and the one against Apple is Google's allowance of "sideloading," the installation of software from the web.
Epic intends to argue that, despite this capability, Google still exploits its dominant market position, making it challenging for consumers to access apps, an individual with knowledge of the matter told CNBC.
Specifically, Epic will highlight Google's contracts with handset manufacturers, which prevent the installation of alternative app stores, and contracts with app developers that forbid them from launching competing app stores.
Google counters these allegations by emphasising that its app store policies are more permissive than Apple's. It allows handset makers to feature alternative app stores on Android phones and enables users to directly download apps from the internet.
Google also points out that Epic itself benefits from these arrangements, distributing its games through Samsung's Galaxy app store and permitting direct downloads of Fortnite.
"Android is the only major mobile platform that gives developers multiple ways to distribute apps," Google asserts.
Google's primary argument in this case centres on demonstrating that the fees it charges developers are fair and essential for maintaining a popular marketplace that developers rely on to reach users.
"The truth is that Epic simply wants all the benefits that Android and Google Play provide without having to pay for them," said Wilson White, Google's vice president of public policy and government affairs.
Google asserts that the fees it levies are among the lowest compared to major app stores, and 99% of developers selling digital content are charged a fee of 15% or less.
The Epic trial introduces another antitrust front for Google, adding to the mounting legal challenges.
In addition to the Epic case, the US Department of Justice has accused Google of maintaining an illegal monopoly in the search industry.
Google had been preparing to face a court battle against Match Group, a dating app company, and a group of US state attorneys general over their complaints concerning the mobile Play store. However, these claims were settled in the weeks leading up to the trial, with Match Group agreeing to pay Google a fee in exchange for using its own billing system.
Following this development, Epic Games' CEO, Tim Sweeney, made it clear that the company remains resolute, stating on social media platform X (Twitter) that "Epic will go to trial against Google alone."