The Days of Google’s Unchecked Dominance May Be Over
Reading Time: 5 minutesIs This the Beginning of the End for Google?, How a Fortnite mishap led to an epic loss., Does the Epic v. Google ruling spell the beginning of the end for Google?
Two years after (mostly) losing out in an antitrust case meant to puncture Apple’s dominance of the smartphone-app marketplace, the video game juggernaut Epic Games has finally notched a historic victory—one worthy of its name—against a different Big Tech giant. This week, a federal grand jury convicted Google on four charges of establishing an antitrust market through the Play Store, Google’s Android-centric equivalent to Apple’s App Store.
Epic Games’ attorneys, who simultaneously filed lawsuits against Apple and Google back in 2020, had lodged similar accusations against both companies, complaining that they exercised undue control over the promotion and distribution of app-based games like Epic’s Fortnite, and unfairly penalized the creation and use of app markets not owned by either Google or Apple. This allowed the corporations to tack a 30 percent surcharge onto all purchases made through downloaded mobile apps (yes, even free ones), which, for Epic, included the option to have Fortnite players buy various amounts of its in-game currency, ‘V-Bucks.’
The Monday night decision from the United States District Court for the Northern District of California thus presents a curious state of affairs, one where Google (which plans to appeal the ruling) may be held liable for app-store misconduct by a gaming company—all while it faces off against the U.S. government in another antitrust suit that targets Google’s singular rule over the search-engine market as well as its hold over subsidiary web services like YouTube and, indeed, Android mobile.
In other words: One of Google’s multipronged monopolies, which help make for its global ubiquity and Hydra-size market control, may finally get broken up—in part because Google (and Apple) once kicked Gen Z’s favorite game out of the Play Store for attempting to skirt Google’s onerous fees. The consequences of that action could be very good news for the U.S.’s reinvigorated antitrust movement, which is also trying to block Big Tech from swallowing up other video game brands (yep, the Microsoft-Activision brouhaha is still going strong) and loosen the industry’s stranglehold over every digital sector in existence. Additionally, it could help save money for gamers who prefer phone play and, in line with one unexpected provision of the 2021 Apple decision, change the entire app-store experience for all smartphone owners. Should the fallout of Epic v. Google shake out in this manner, it’ll all be thanks to a Fortnite battle.
Back in the summer of 2020, you might recall, Epic Games conducted something of a sting operation on Apple and Google, thanks to CEO Tim Sweeney’s exasperation with paying the 30 percent fees to both companies for every stack of V-Bucks and bundle of tools (guitars, weapons) with which players could equip their Fortnite avatars. In Sweeney’s view, that 30 percent rate was way too big, placing an excessive burden on companies like Epic even though both Apple and Google clearly had enough cash on hand; if they wanted to continue charges on their app stores, they could do just fine with a smaller rate. Yet, not only did neither of them budge, they also penalized app-makers’ attempts to establish their own independent digital stores. Google refused to list such third-party marketplaces and billing systems for download. Apple denied such businesses the ability to receive certain metrics and information around the reach of their promotional efforts—and also made it impossible for iPhone owners to use any non-Apple app markets altogether.
As Cory Doctorow characterized it in MediaDownloader, Sweeney decided to set up some ‘bait‘ for Apple through a campaign called ‘Project Liberty.’ Throughout early 2020, Epic Games developers designed and implemented a structural change in the Fortnite app that would allow players to purchase V-Bucks directly from Epic and avoid the extra fees. Both the App Store and Play Store allowed for the update, because no one told them that this was the actual intention behind it. Epic only made the change public on Aug. 13, 2020, informing players that they could get a discount on V-Bucks by buying them from Epic itself through the coding loophole. In response, the infuriated Apple/Google duopoly kicked the game off their marketplaces. Seizing on the moment, Epic filed suit against the conglomerates for their unilateral move, and now here we are.
Of course, lodging a case is one thing, and fighting for it is another. As Aaron Mak wrote in MediaDownloader back when the Northern California federal court handed down its Epic v. Apple verdict in September of 2021, Epic’s goal was hampered by the finding that ‘Apple does not maintain an illegal monopoly through its App Store.’ In fact, the federal judge ruled in favor of Apple on nine of the 10 charges brought by Epic. But, as Mak noted, that one conviction against Apple was not insignificant for Epic: ‘For that final count, [the judge] found that by barring apps from directing users to other payment systems, Apple was violating California’s Unfair Competition Law. She issued a permanent injunction dictating that the App Store must allow developers to inform users on ways [to] make purchases outside the company’s own payment system.’ The entirety of that decision was upheld by an appeals court earlier this year, although that same court later paused the California district court’s demands that Apple allow its customers to be informed of app-payment services outside of its control—because both Apple and Epic are taking time to bring their fight in front of the Supreme Court.
With the fate of the Apple-Epic brawl now in SCOTUS’ hands, the gaming conglomerate finally got the chance to take Google to court last month, in the same jurisdiction that initially ruled on the Apple case. As Ars Technica explained when the new fight kicked off, this both was and wasn’t really a repeat of the Apple litigation: Many of the complaints were similar, but the circumstances were different with Google, which didn’t block app payments through third parties (even when Fortnite wasn’t listed on the Play Store, it was still operable on Android devices) but did make them far too difficult to accomplish. Epic also cited special discounts that Google offered to game developers like Nintendo in order to discourage their efforts to brush off the Play Store and build out in-house marketplaces for their games; Epic, for its part, claimed that when it voluntarily pulled Fortnite from the Play Store in 2018, in protest of the 30 percent tax, Google in turn offered Epic ‘up to $208 million’ in order to keep listing Fortnite for download. Plus, the Apple decision came from one judge, while Epic hauled Google in front of a jury, whose members took less than four hours of deliberation to find the defendant guilty on all charges. One factor that may have contributed to such a quick decision was the revelation that Google may have disposed of evidence that would have been relevant to the proceedings.
Now, none of this means a sustained win for Epic; Google will be quick on the draw for an appeal, and before we even get to that part, we have yet to find out what specific terms the district court will impose on Google as a result of this ruling. It’s very possible Epic could be denied some of its ambitious demands around future app-store workings, like the already struck-down request that Google be held in check with an anti-circumvention provision. Yet what’s most important is that we even got to this place. This is the first antitrust suit Google has ever lost in its home country. It’s likely only the beginning.
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