Google loses App Store court battle with Fortnite makers

A jury on Monday ruled that Google violated antitrust laws to extract fees from Epic Games and other developers and limit competition in its Play mobile app store, in a case that could rewrite the rules on how thousands of businesses make money on Google’s smartphone operating system. , Android.

After deliberating more than three hours, a nine-person federal jury sided with Epic Games on all 11 questions in the month-long trial, the latest twist in a three-year legal battle.

A jury in San Francisco found that Epic, maker of the hit game Fortnite, engaged in anticompetitive conduct that harmed the video game maker by maintaining a monopoly on the smartphone app store market.

Google has been forced to change its Play Store rules, allowing other companies to offer competing app stores and making it easier for developers to avoid a cut of what they collect from in-app purchases.

Judge James Donato of the United States District Court for the Northern District of California will determine the necessary remedies for Google’s conduct next year. Google has said it will appeal the ruling.

Throughout the trial, Google’s lawyers and executives argued that it competed against Apple’s App Store, which is hugely popular in the U.S., and thus could not operate an Android monopoly.

The ruling provided a lift to Epic’s years-long quest to weaken the power of Google and Apple in the mobile app ecosystem, and came two years after Epic largely lost a similar case against Apple — which both sides are trying to appeal. US Supreme Court. That verdict was decided by a judge.

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While pursuing a lawsuit filed against Google in 2020, Epic sought to keep more of its revenue from in-app purchases and offer an app store that competes with Play on the Android platform.

At the same time, Google was fighting Epic’s claims that it was defending itself in another antitrust hearing in Washington, D.C. Reshape the technology force when decided next year.

On the Play Store, Google charges app makers a 15 percent fee on customer payments for app subscriptions and up to 30 percent on purchases of popular apps downloaded from the store. Google says 99 percent of developers qualify for 15 percent or less of in-app purchases.

Google plans to appeal the ruling and will “continue to defend the Android business model,” Wilson White, Google’s vice president of government affairs, said in a statement. “The test has made it clear that we are competing fiercely with Apple and its App Store and App Stores on Android devices and gaming consoles,” he said.

Epic said Blog The ruling was a “victory for all app developers and consumers worldwide” and “proved that Google’s App Store practices are illegal and that they abuse their monopoly to overcharge, stifle competition and stifle innovation.”

Tim Sweeney, Epic’s chief executive, said, “Free Fortnite!” At X, formerly known as Twitter, after the ruling.

Epic sparked a war with Google by allowing customers to make in-app purchases directly through Epic, violating Google’s rules. Google quickly banned Fortnite, and Epic responded by filing a lawsuit.

The jury found that Google violated antitrust laws in two markets: the Android Play Store and Android’s in-app billing system. Google intentionally maintains monopoly power, allowing it to impose unreasonable restrictions on other market players’ ability to compete.

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In an initiative called Project Huq, the jury took issue with Google’s attempt to pay large developers to continue using the Play Store. Epic’s lawyers portrayed the move as a “bribe” to big app makers, which Google denied.

“A clear ruling like this will make it very difficult for Google to overturn it in the post-trial conference and on appeal,” Paul Swanson, an antitrust attorney at Holland & Hart, said in an interview. He said the district court process could be completed in a few months, and Google’s appeal to the U.S. Court of Appeals for the Ninth Circuit could take 12 to 18 months.

The jury also faulted Google’s contracts with Android phone makers like Samsung, which force them to pre-install Google applications on their devices.

During the trial, Epic’s lawyers said Google had deleted some internal chat messages related to the case, which Mr. Swanson said.

“Google’s concern is that a jury will look at all these issues they’ve spent weeks looking at and say, ‘Can I trust Google?’ “Putting it through the lens of,” Mr. Swanson said. “The stark truth is that Google has finally had to face its consumers in court.”

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