Epic says Google puts up “myriad contractual and technical barriers” for sideloading.
Epic vs. Apple/Google
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- Supreme Court denies Epic’s request to open up App Store payments during appeals
- Apple’s iOS “walled garden” doesn’t break antitrust laws, appeals court affirms [Updated]
- Epic strikes back at Apple’s iOS “security” defense in appeals court
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Two years ago, Epic Games went to court to challenge what it called Apple’s monopolistic control of the iOS app marketplace. Now, as that trial crawls through the appeals process, Epic’s legal focus is moving to the other major mobile platform holder: Google.
The Epic v. Google trial, which starts today in a US district court in San Francisco, won’t be a precise rehashing of the issues laid out in that Apple trial. But while legal history won’t precisely repeat itself in the coming days and weeks, it will very likely rhyme.
Just when I thought I was out…
Both of Epic Games’ antitrust cases date back to August 2020, when Epic flaunted iOS and Google Play App Store rules by hotfixing an “Epic Direct Payment” option into Fortnite‘s mobile in-game V-Bucks store. While Apple was the first to respond by removing the game from iOS that afternoon, Google followed suit just a few hours later by taking the game down from the Google Play Store. Epic was ready with lawsuits to instantly respond to both moves.
At the time, Google was quick to point out that the ability to sideload apps on Android meant Epic hadn’t been completely barred from distributing Fortnite on the platform (as it had been on iOS). “The open Android ecosystem lets developers distribute apps through multiple app stores,” Google said in 2020. “While Fortnite remains available on Android, we can no longer make it available on Play because it violates our policies. However, we welcome the opportunity to continue our discussions with Epic and bring Fortnite back to Google Play.”Advertisement
FURTHER READING
Confirmed: Fortnite on Android will drive its bus past Google’s 30% cut [Updated]
Epic was well aware of this difference, too. Back in 2018, the company pulled Fortnite from the Google Play store voluntarily as a way to avoid what it called Google’s “disproportionate” 30 percent “store tax.” But while Epic attracted tens of millions of Android Fortnite downloads without Google Play, the publisher was soon publicly complaining of technical issues and malware sites masquerading as “official” Fortnite download sources.
FURTHER READING
Google wins victory royale over Epic Games, snags Fortnite for Google Play
By April 2020, Epic had returned to the Google Play store, accusing Google of imposing a number of important limits on its sideloaded software. As the company said at the time:
Is Google Play a monopoly?
Epic’s legal complaint against Google focuses on many of the same issues brought up in the above statement. While Android doesn’t completely disallow competing app stores as Apple does on iOS, Epic argues that Google still puts up “myriad contractual and technical barriers” to “eliminate competition” for the Google Play store.
For instance, Epic argues that Google discourages sideloading by forcing users to go through “a dozen steps, requiring the user to change default settings and bravely click through multiple dire warnings” to circumvent the Play Store. Even after going through these steps, sideloaded apps can’t make use of system functions like automatic background updating, Epic says.
Google also signs deals with Android OEMs that force them to pre-install the Play Store. Meanwhile, Epic says those deals often include exclusivity clauses that outright prevent the pre-installation of competing third-party app stores or offer “significant financial incentives” to discourage that kind of pre-installed competition.
Epic says these facts help explain why Google Play represents more than 90 percent of apps downloaded from Android app stores, according to European Commission data cited in Epic’s complaint, effectively giving Google what Epic calls “monopoly power” in the space. That power allows Google to take a 30 percent cut of all Google Play revenues, which Epic argues is higher than what would be charged in a truly competitive marketplace (this argument should feel very familiar to those who followed the Apple trial).
“Google engages in these anticompetitive acts to eliminate consumer choice and competition in mobile app distribution,” Epic wrote in its complaint. “Google has no legitimate justification for these restrictions. Google therefore has changed its course of conduct, breaking its promise that Android would be an ‘open’ ecosystem in which other participants could participate fairly.”
Epic’s filing also points to a Google program called “Project Hug,” which is designed to send “hundreds of millions of dollars” to the “20 top developers” on Android to “mitigate… risk that [those developers would] de-prioritize Google Play for title distribution,” according to internal documents cited in the complaint. Epic also cites its own experience with Google, which allegedly offered a “special deal” worth “up to $208 million” to keep Fortnite on Google Play back in 2018.
Such a deal may have been worth it to prevent what Google’s finance director for platforms and ecosystems called a “contagion risk” in internal documents cited by Epic. Google allegedly worried that Fortnite‘s successful example on its own Android app store could convince other major developers like “Blizzard, Valve, Sony, [and] Nintendo” that they would be “able to go on their own” on Android without the Google Play store, according to quotes from Epic’s filing.
In its own legal filing, Google points to the fact that Samsung and LG offer successful, proprietary app marketplaces on their phones as evidence that it does not have monopoly control over Android app distribution. Google also points to competition from Apple’s mobile phone marketplace as an effective limitation on its monopoly power, much as Apple argued that it was limited by Android competition in its own trial (not to mention competition from closed console marketplaces). And, much like Apple, Google argues that pushing people toward its own app store helps “protect the safety and reliability” of its users.Advertisement
“Plaintiffs may want to take advantage of Google Play’s popularity on their preferred terms—using Google Play’s distribution to reach a large audience while preventing Google from charging for that distribution—but the antitrust laws do not impose any obligation on Google to do so,” the company wrote in its motion to dismiss.
In it to win it
Much like the Apple case, the Epic v. Google trial will likely center on highly technical definitions of what “market” is legally relevant (e.g., “the market for Android games” vs. “the market for all mobile games” vs. “the market for all video games). This definition will go a long way toward determining whether Google has an effective monopoly over that market that needs a legal remedy. Unlike the Apple trial, though, Epic will be making its case to a jury rather than trying to convince a judge with highly technical expertise and experience in the relevant laws.
Epic has also found itself increasingly isolated in its legal efforts against Google’s alleged monopoly in recent weeks. Last month, a group of 37 state attorneys general reached a tentative settlement agreement in a similar monopoly case with Google. And just last week, Match Group, the owner of several popular dating apps, also reached a settlement with Google, setting up the ability for those apps to implement “user choice billing” for other payment options in the near future.
Despite those moves, Epic seems unlikely to agree to a financial settlement or anything less than the elimination of what it calls the “Google Tax” on Android. In fact, Epic’s filing is upfront that the company “does not seek monetary compensation from this Court for the injuries it has suffered” or “favorable treatment from Google for itself.” Instead, Epic writes that it simply wants Google to “make good on [its] broken promise: an open, competitive Android ecosystem for all users and industry participants.”
“Consumers only benefit if antitrust enforcement not only opens up markets, but also restores price competition,” Epic CEO Tim Sweeney wrote last month. “The Google Tax is antithetical to that competition.”
