In a groundbreaking decision, a federal court jury ruled on Monday that Google had wielded its monopoly power through anticompetitive practices in its app distribution, specifically on its Google Play Store. The verdict, delivered after less than four hours of deliberation following a month-long trial in San Francisco, poses a significant threat to Google’s dominance in the mobile app economy and could lead to substantial revenue losses for the tech giant.
The court found that Google Play’s anticompetitive conduct amounted to a willful exercise of monopoly power. US District Judge James Donato, overseeing the trial, is set to determine whether Google must allow alternative payment and app distribution methods outside its proprietary app store. This decision mirrors a similar legal challenge against Apple Inc.’s app store by Epic Games two years ago, which is currently awaiting review by the US Supreme Court.
Epic’s Demand for Change and Google’s Response
Epic Games, the maker of Fortnite, seeks not monetary damages but rather a transformative change in Google’s app store policies. While Google, whose shares dipped slightly in extended trading, plans to challenge the verdict, it emphasized the competition in the mobile platform market, asserting that Android and Google Play offer more choice and openness than their counterparts. Epic’s CEO, Tim Sweeney, expressed satisfaction with the ruling and indicated a desire for practical changes in Google Play Store practices.
The verdict holds the potential to reshape the entire internet landscape, according to legal experts. Stanford University law professor Mark Lemley emphasized the profound impact, stating that the decision could challenge the trend towards walled gardens and concentrated internet markets.
Implications beyond Epic and Google
Legal analysts predict that the far-reaching consequences of this verdict extend beyond the immediate dispute between Epic and Google. Paul Swanson, a technology and antitrust law specialist, noted that a sweeping verdict like this would be challenging for Google to overturn in post-trial proceedings or on appeal. The trial coincided with Google defending itself in a separate antitrust case brought by the US Justice Department targeting the company’s search business, further adding to the stakes involved.
Epic initially filed the lawsuit against Google three years ago, alleging monopolistic practices in the Android app distribution market. Google defended itself by arguing that its partnerships were aimed at enhancing competition against Apple’s iPhone. The trial featured testimonies from key figures, including Tim Sweeney and Alphabet CEO Sundar Pichai, shedding light on Google’s internal communications and business strategies. The verdict concluded that Google restrained trade through various means, including revenue-sharing agreements with device manufacturers and limitations on alternative app distribution methods.
As the tech industry grapples with the implications of this verdict, the landscape of mobile app stores and their policies may undergo significant transformations, ushering in a new era of competition and openness. The case, officially titled “In Re Google Play Store Antitrust Litigation,” marks a pivotal moment in the ongoing scrutiny of tech giants’ market practices.
