For two months, Google has battled the Justice Department in a Washington court over accusations that the company is abusing its dominant position in search and online advertising to crush rivals, a high-stakes antitrust case that could reshape the most popular search engine in the world. . Now he faces another legal challenge closer to home.
On Monday, Epic Games, the company behind the hit game Fortnite, will appear in federal court in San Francisco to begin a month-long trial in its own antitrust lawsuit against Google. Epic is expected to argue that Google is violating state and federal antitrust laws, as well as its founding principle, “Don’t be evil,” by exercising monopoly power over app developers in its Google Play Store on Android mobile phones.
“Google has relegated its motto almost to the background and is using its size to do harm to its competitors, innovators, customers and users in a series of markets that it has come to monopolize,” Epic wrote in its complaint, which was filed for the first time in 2020. The video game developer had attempted to bypass Play Store fees by allowing Fortnite players to pay Epic directly for in-app items, leading Google to ban the game from the store.
If Epic wins, Google could be forced to change its restrictive Play Store rules, allowing other companies to offer competing app stores and making it easier for developers to avoid the cut it takes from in-app purchases. Google typically charges a 15 percent fee for customer payments for app subscriptions and 30 percent for purchases made within apps downloaded from the store. (The company says 99 percent of developers qualify for a fee of 15 percent or less on in-app purchases. Larger app makers like Epic must pay 30 percent.)
The simultaneous antitrust lawsuits underscore how Google is playing defense on multiple fronts as regulators and competitors try to reduce its influence on the Internet.
Part of a broader effort by tech regulators in recent years to curb the growing power of Big tech, the lawsuits are potentially damaging distractions for Google as it tries to focus on competing with Microsoft, OpenAI and others in the emerging field. of generative technology. artificial intelligence.
“It’s hard to imagine Google coming out of the challenge unscathed” next year, said Paul Swanson, an antitrust lawyer at the firm Holland & Hart. “At some point, with so many cases, one breaks against you.”
Still, Epic faces an uphill battle. He raised similar claims against Apple in a 2021 lawsuit he filed fighting over a fortnite cartoon banana and Tim Cook’s first court appearance as Apple CEO, but a federal judge rejected most of Epic’s arguments.
This test has key differences that make Epic think it has a chance. For one thing, the case will be decided by a jury rather than a judge. Epic will also point to what it believes is damning evidence, arguing that Google forced phone makers like Samsung to pre-install and promote its apps on their devices. It will argue that a Google program called Project Hug paid some developers to continue using Google’s payment system. Epic is also being countered by Google, which is demanding damages.
Swanson said a jury trial could be beneficial for Epic.
“Google faces a much greater risk when faced with a group of regular people evaluating its behavior versus judges evaluating behavior through the lens of a century of antitrust jurisprudence,” he said.
Over time, the antitrust claims against the Play Store have boiled down to a one-on-one confrontation between Google and Epic. In 2021, dozens of state attorneys general sued Google on similar grounds. Google reached a tentative agreement with the group in September. On Tuesday, Google also announced a settlement with Match Group, the dating app company, which had joined the Epic case.
“Epic wants all the benefits of Android and Google Play without having to pay for them,” Wilson White, Google’s vice president of public policy, said during a briefing with reporters. “The lawsuit would radically change a business model that has reduced prices and increased options.”
In 2020, Epic took on Google and Apple by encouraging its customers to bypass the tech giants and pay Epic directly for purchases made in Fortnite, the animated battle royale game. That was a violation of both companies’ rules, so they kicked Fortnite out of their app stores.
Epic responded with lawsuits and a public relations blitz focused on Apple. Fortnite was still available on Android phones because Google allows a practice called sideloading: downloading apps from the Internet outside of a phone’s app store.
Epic is expected to argue that Google has made life more difficult for both Android phone users and app developers through a variety of means. Downloading, Epic will argue, is an arduous process that most phone users struggle with, meaning Google can maintain de facto control over what apps are on their phones through its Play Store restrictions. Samsung also offers an app store on its Android devices.
Google CEO Sundar Pichai and Epic CEO Tim Sweeney are expected to testify.
This week, Pichai testified in the Justice Department’s major antitrust lawsuit against search engine Google. The department and attorneys general in dozens of states accuse Google of crushing competition by paying Apple, Samsung and other partners billions of dollars annually to keep its search engine as the default in their Web browsers.
Google says it got the default rankings because it has a superior product and its rivals haven’t invested in search.
In addition to Pichai’s appearance, the case has included testimony from Google employees and executives at some of its competitors, including Microsoft CEO Satya Nadella. A ruling is likely in 2024.
A federal judge in Virginia is considering a separate Justice Department lawsuit accusing Google of illegally abusing its monopoly power over technology that delivers online advertising. A trial in that case could begin next year.
David McCabe contributed reporting from Washington.
