A few years ago, Epic Games faced off against Apple in South Korea. There, they tried to convince the judicial system that Tim Cook’s company had a monopoly on the smartphone industry. If you wanted to be on an iPhone, you had to pay a fee.
And if Epic couldn’t prove that Apple’s walled garden of iOS is a monopoly, how could Google, a much more open system, fare worse against the developer of Fortnite? The battle began three years ago and now it’s coming to an end.
Analysts believe that Epic Games is likely to win. Now that both parties have presented their initial arguments to a jury.
According to The Verge, while Google spent most of its first day trying to explain the complex intricacies of the business, Epic was able to paint a black-and-white picture of good and bad, with itself as the clear loser.
Android, the monopoly no one talks about
Epic’s lead attorney, Gary Bornstein, argued that Android functions as an illegal monopoly. He essentially labeled Google as a bully and cheater who “bribes” or “blocks” any attempts to compete with Android’s Google Play store.
And what’s the result? A status quo where the vast majority of Android app installations come from Google Play, with only a small portion attributed to the Galaxy Store preinstalled on Samsung phones.
Bornstein showed the jury members graphics of Google’s hefty profit margins (a 70% cut from annual revenues of $12 billion, according to Epic) and pointed out several unsavory ways Google allegedly tried to prevent anyone else from taking a share of that money. This included paying game developers not to create their own app stores or independent app launchers, similar to what Epic did with Fortnite.
“Google pays real and potential competitors not to compete. They literally give them money and other valuable things,” said Bornstein. “It’s like Google saying, ‘Here’s $360 million, why don’t you stay out and let me win?’”
The result for consumers, as indicated by previous lawsuits by Epic, is that we pay higher prices for apps than we would if there were more competition or if app store and payment processing fees were lower.
However, although this is likely to be addressed later in the trial, Epic chose to focus more on portraying Google as the villain from day one.
It’s unclear to what extent these claims will hold up under closer scrutiny. Those $360 million, for instance, refer to an alleged payment that prevented Activision from opening an app store that could compete with Google Play.
But Activision told The Verge in 2022 that they “never reached an agreement for Activision not to open its own app store,” and Google now claims to have evidence to prove it.
Google is in a tough spot: they have to defend themselves however they can
Google spent its 45 minutes trying to explain that its dominance in the Android app market is not nefarious but simply the natural result of fierce competition between Google and the iPhone’s iOS App Store, which Google would like the court to believe is the real competition.
If Google manages to convince the jury of this, it could be a winning argument in the case because, obviously, Google doesn’t have a monopoly on app stores or phones in general.
“You can’t separate the quality of a phone from the quality of its app store, and that means Google and Apple compete with each other,” began Google’s lead attorney, Glenn Pomerantz.
But Google spent a significant part of its opening statement trying to explain its seemingly questionable behavior as normal business practices and didn’t always succeed right from the start.
“When they show you these charts that show all these downloads from Play and not from the Galaxy Store, that’s what Samsung phone users are choosing. But they use the Play Store. There’s nothing stopping them from going to the Galaxy Store; it’s just what works for them,” he argued.
I previously referred to Google as “comparatively open,” and this openness is likely to be heavily debated in the coming weeks. Epic Games has promised to “prove that Google has shut down every single alternative” to the Play Store during this trial.
Google points to the simple fact that it allows alternative app channels, something that its Android rival, iOS, does not do.
Google also tried to portray Epic as the villain. They did so by bringing up Epic Games’ secret plan called “Project Liberty” to discreetly update Fortnite with code to bypass app store fees, get their app kicked out of Apple and Google’s app stores, and then file lawsuits.