Headline: Google loses antitrust lawsuit over its Android app store, facing potential loss of billions in profit
In a significant blow to Google’s technology empire, the tech giant has lost an antitrust lawsuit over barriers to its Android app store. A federal court jury has decided that Google’s payments system is anticompetitive and has caused harm to smartphone consumers and software developers. The case was brought by Epic Games, the maker of popular video game Fortnite, who alleged that Google has been abusing its power to protect its Play Store from competition.
At the heart of the lawsuit was Google’s commission structure, where the company collects a percentage ranging from 15% to 30% on digital transactions within apps, similar to Apple’s iPhone app store. Epic Games argued that Google employs a “bribe and block” strategy to discourage competition. They claimed that downloading apps from outside the Play Store is complicated for most users, and Google sends dire warnings to deter this behavior.
Google’s CEO, Sundar Pichai, and Epic’s CEO, Timothy Sweeney, played significant roles in the trial, with the jury seemingly favoring Epic’s arguments. Google plans to appeal the decision, but analysts believe they face an uphill battle. Possible remedies for Google’s anticompetitive behavior will be determined by U.S. District Judge James Donato, who will hold hearings in January 2024 to decide the next steps.
This ruling potentially places billions of dollars in annual profit generated from Play Store commissions at risk for Google. However, the company’s main source of revenue, digital advertising tied to its search engine and other services, will not be directly impacted. Shares in Google’s parent company, Alphabet Inc., slipped less than 1% following the verdict.
Interestingly, Apple previously won a similar case brought by Epic against the iPhone app store. However, the jury in the Play Store case saw things differently than the judge in the Apple case, even though Google technically allows Android apps to be downloaded from different stores, unlike Apple.
It remains to be seen how Google will navigate these legal challenges and adapt its app store policies in response. The outcome of this case could have far-reaching implications for the tech industry and the power of major app store platforms.
