Epic Games Defeats Google In Court. Threatens $200 Billion/Year App Store Industry

On Monday, a San Francisco Jury handed its decision in favor of the allegations against Google for business malpractices. For years, Fortnite maker Epic Games has been railing down on Google against high commissions and biased business relations with favored tech giants. Finally, an anonymous jury sided with Epic and stated that Google has been acting unfairly as a monopoly. 

What’s The Fight About?

In 2020, Fortnite was kicked off the Google Play Store and Apple’s App Store for secretly installing its own payment system. The idea behind Epic’s epic move was to bypass the up to 30 percent commission system, which the two giants did not charge for other big tech players. In response to the ban, Epic sued both companies.

Epic Games has been fighting against both Google and Apple for their up to 30 percent commission rates for in-app purchases, subscriptions, and other transactions. It also alleged the two companies for forming biased commission prices with those they favored, including Spotify. The case also highlighted how these two companies were dictating the usage of mobile apps to the general public, creating a mass manipulation to form a duopoly. Epic Games also alleged Google and Apple for not allowing freedom to conduct business on their apps without strict rules and regulations.

What’s The Result?

In 2021, Apple won against the case filed by Epic, but a single jury handed the decision. This time, Epic went forward with an anonymous jury panel’s verdict in the San Francisco court and won with clear indications. The result is that Google will have to revise its commissions to create a fair-price ecosystem for all businesses onboarding its platform. The jury also declared that Google should not restrict businesses to use only their payment system on the apps and should not offer custom agreements to certain developers.

What’s Happening Next?

Even though Apple won in 2021, the stark defeat of Google will most likely reiterate Apple's terms. If not, it will lead to a fresh investigation on Epic’s earlier lost case, for which most of the facts favor the game maker. If Epic takes Apple back to court, a win is highly probable. 

The immediate aftereffect is we will see a shift in the marketplace where big tech companies will have to make accommodations — whether it is more access, better terms, more options for developers — to stave off legal exposure.

 - Paul Swanson (partner at Holland & Hart)

Mass public opinion is that the two tech giants have gained too much power and control. Google is also facing scrutiny by a Justice Department Judge over its power in search, though the outcome won’t be out for months. With tech players like Epic bringing down the major revenue-generating processes of Google and Apple, there might be a shake-up in the $200 Billion industry. Consumer prices for services may also go down, favoring the loosening of rules even further.

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