As the highly-anticipated Epic vs Google trial begins today, here are the key details of this legal showdown that could reshape the tech industry
The jury trial for the antitrust dispute between Epic Games and Google, centered on Google's payment system and regulations, is set to begin today. The trial promises to be a significant event, with notable figures such as Sundar Pichai, the CEO of Google's parent company, Alphabet, and Epic Games' CEO, Tim Sweeney, anticipated to take the stand as key witnesses.
Here is everything you need to know about the Epic vs Google legal battle.
Epic v Google antitrust trial begins Monday morning. See y’all on the other side!https://t.co/YpUosDTrAd
— Tim Sweeney (@TimSweeneyEpic) November 6, 2023
Epic vs Google: When and How Did It Begin?
The Epic vs Google legal clash began three years ago and originated from a significant strategic change implemented by Epic Games in their popular game, Fortnite. Epic introduced a hotfix in the game, directing players to purchase in-game currency (V-Bucks) directly from Epic's platform. The purpose of this move was to circumvent Google's standard practice of taking a 30% cut from all in-game transactions conducted through its ecosystem.
Photo Credit: Epic Games
As a retaliatory move, Google decided to remove Fortnite from the Google Play store, which set the stage for a significant legal battle. In a swift response, Epic Games filed an antitrust lawsuit against Google.
Epic vs Google: What are the Accusations?
Epic's case against Google revolves around two core arguments. First, they contend that Google's mandate for developers to exclusively utilize the Play Store's payment system for all transactions is anti-competitive. This argument hinges on the idea that such a requirement stifles innovation, inhibits fair competition, and limits user choice within the Android ecosystem.
Epic Games isn't a party to the proposed Google Play settlement with the States Attorneys General.
We're fighting for consumer and developer freedom to do business directly, free of monopoly stores, monopoly payment processors, and monopoly taxes.https://t.co/6hagYKLWPg
— Tim Sweeney (@TimSweeneyEpic) September 6, 2023
Secondly, Epic argues that although Android users have the option to sideload apps from sources outside of Google's marketplace (in contrast to Apple's iOS), Google Play's dominant position in the Android app ecosystem is so overwhelming that it's often neither financially viable nor profitable for developers to distribute their apps independently.
What Does Google Say?
Google representatives claim that Epic's assertions are without merit. Android offers developers the flexibility to distribute their applications through various app stores or directly to users via the internet.
Google's stance centers on the open nature of the Android operating system, which allows developers to choose their preferred distribution channels. Android's design enables a diverse and competitive app ecosystem, allowing developers to reach users through alternative app stores, independent distribution, or their own websites.
“The most relevant thing for us is showcasing to the jury how Android has created more choice, flexibility and openness than any other platform, and that Epic has actually availed itself of that level of choice and flexibility,” Wilson White, Google’s vice president of public policy and government affairs, said ahead of the trial. “As a result, these needless claims that they’ve brought should fail.”
How Did Epic vs Apple Turn Out?
Epic is also engaged in a simultaneous legal battle against Apple, a case that bears resemblances to its dispute with Google. However, in the Apple lawsuit, Epic puts forth additional arguments, underscoring that the tightly controlled iOS ecosystem essentially compels developers to rely solely on the App Store for app distribution to iPhones and iPads.
I find it kind of bonkers that Epic would continue its antitrust case against Google Play, when it lost a nearly identical case against Apple more than a year ago.
— Adam Kovacevich (@adamkovac) November 3, 2023
The verdict, nonetheless, notably favored Apple on nine of the ten counts brought forward. Epic secured a victory on only one count, specifically concerning Apple's anti-steering policies. In this particular ruling, the judge concluded that Apple must put an end to its anti-steering practices, allowing developers the freedom to offer users links that direct them to where they can make direct purchases.
Epic Games and Apple have not reached a resolution following the judge's ruling, and both parties are actively pursuing appeals. The case has now advanced to the Supreme Court, underscoring the significance of the matter. As a result, no modifications or adjustments have been implemented within the iOS ecosystem or its payment system.
Why Is This Trial Important?
The trial's result holds substantial significance for the fate of Google's app store, and this viewpoint is one shared by both Epic Games and Google. Epic Games is resolute in its mission to contest what it sees as Google's dominance over Android app stores and payment mechanisms. Their central objective is to relieve the financial strain placed on developers, an expense they call the “Google Tax,” which can either diminish developers' earnings or be passed on to consumers.
According to Google, should Epic prevail in this legal dispute, it could impact the security and competitiveness of Android devices. Google argues that it might weaken the fundamental protections in place against sideloaded apps, potentially introducing security risks for Android users.
This concern stems from the belief that, without adequate regulation, the simplicity of sideloading apps might create opportunities for unverified or malicious software to infiltrate the Android ecosystem.
Google also asserts that a win for Epic could jeopardize Android's ability to compete effectively with the iPhone. The argument here is that Android's strength as an operating system partly hinges on its open nature, allowing a multitude of app stores and distribution methods. However, if the ruling compels Google to provide its app store for free or to relinquish more control over its ecosystem, it may limit its ability to compete with Apple's tightly controlled iOS environment.
This legal battle thus becomes a pivotal juncture with far-reaching consequences, spanning not only the security of Android devices but also the future of app distribution and payment systems in the broader mobile ecosystem. The verdict will have a bearing on the dynamics of the Android platform and may shape the rules and regulations governing digital app marketplaces in the tech industry.