Google Loses Antitrust Court Battle With Fortnite Video Game Makers – The New York Times

A jury ruled Monday that Google violated antitrust laws to deprive Epic Games and other developers of fees and restrict competition in its Play mobile app store. This could redefine the rules for how thousands of companies make money from Google’s smartphone operating system, Android.

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

The jury in San Francisco concluded that Epic, maker of the hit game Fortnite, had proven that Google maintained a monopoly in the smartphone app store market and engaged in anti-competitive behavior that harmed the video game maker.

Google could be forced to change its Play Store rules, allowing other companies to offer competing app stores and making it easier for developers to avoid the cuts the company takes from in-app purchases.

Judge James Donato of the U.S. District Court for the Northern District of California will rule next year on the remedies needed to address Google’s conduct. Google said it would appeal the ruling.

Throughout the trial, Google’s lawyers and executives had argued that Google was competing with Apple’s App Store, which is more popular in the United States, making it impossible to operate an Android monopoly.

The ruling gave a boost to Epic’s years-long push to weaken Google and Apple’s power over the mobile app ecosystem and came two years after Epic largely lost a similar case against Apple – a ruling that both sides are trying to appeal Supreme US Court of Justice. This verdict was made by a judge.

In pursuing the lawsuit against Google filed in 2020, Epic had sought to keep a larger share of revenue from in-app purchases and offer an app store that would compete with Play on the Android operating system.

Google fought back against Epic’s claims while defending itself in another antitrust case in Washington, D.C. The Justice Department and dozens of states have accused the company of illegally maintaining a search and advertising monopoly in a landmark antitrust case reshaping tech power if a decision will be made next year.

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

Google plans to appeal the ruling and will “continue to defend the Android business model,” Wilson White, Google vice president of government affairs, said in a statement. He added that the process “made it clear that we are in tough competition with Apple and its App Store, as well as the app stores on Android devices and gaming consoles.”

Epic said in a blog post that the ruling was “a win for all app developers and consumers around the world” and “proved that Google’s app store practices are illegal and that they are abusing their monopoly to extort exorbitant fees.” , suppressing competition and reducing innovation.”

Epic CEO Tim Sweeney posted “Free Fortnite!” on X, formerly called Twitter, after the ruling.

Epic started the fight with Google by allowing its customers to make in-app purchases directly from Epic, bypassing Google and violating its rules. Google quickly banned Fortnite and Epic responded with a lawsuit.

The jury concluded that Google had violated antitrust laws in two markets, the Android Play Store and Android’s in-app billing system. It was also found that Google intentionally maintained its monopoly power, thereby unduly restricting the competitiveness of other market participants.

The jury criticized Google’s efforts to pay major developers to continue using the Play Store as part of an initiative called “Project Hug.” Epic’s lawyers had portrayed the effort as “bribery” by major app makers, which Google had denied.

“Such a clear ruling will make it much more difficult for Google to fight back in the debriefing and appeal process,” Paul Swanson, an antitrust lawyer at the law firm Holland & Hard, said in an interview. He added that the district court case 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 criticized Google’s agreements with Android phone makers like Samsung, which force them to pre-install Google applications on their devices and set other rules they must follow.

During the trial, Epic’s lawyers said Google deleted some internal chat messages that may have been relevant to the case, undermining the search companies’ credibility, Mr. Swanson said.

“Google’s concern was that a jury would look at all of these issues that they had been examining for several weeks: ‘Can I even trust Google?’” Mr. Swanson said. “The stark reality is that Google finally had to face its consumers in court.”