Technology
Tuesday, December 12th, 2023 3:09 pm EDT
Key Points
- Jury Verdict on Google’s Play Store: A federal court jury has unanimously determined that Google’s Android app store, the Play Store, has been shielded by anticompetitive barriers, dealing a significant blow to Google’s technology empire. The decision followed a four-week trial initiated by Epic Games, maker of Fortnite, which filed a lawsuit three years ago alleging that Google abused its power to protect its Play Store from competition, much like Apple’s practices with its iPhone app store.
- Anticompetitive Practices and Commission Structure: The trial focused on Google’s lucrative payment system within the Play Store, where the company collects a commission ranging from 15% to 30% on digital transactions within apps, similar to Apple’s App Store. Epic Games argued that Google’s practices resulted in higher prices for developers and consumers, as well as less innovation and quality. The jury saw Google’s behavior as that of a ruthless bully deploying a “bribe and block” strategy against competition.
- Potential Financial Impact and Google’s Response: Depending on how the judge enforces the jury’s verdict, Google could face the loss of billions of dollars in annual profit generated from Play Store commissions. Google plans to appeal the decision, asserting that Android and Google Play offer more choice and openness than other major mobile platforms. The case raises questions about the future of app store practices and antitrust concerns within the tech industry, with potential implications for Google’s dominance in the market.
A federal court jury delivered a unanimous verdict, determining that Google’s Android app store, the Play Store, has been protected by anticompetitive barriers that have harmed smartphone consumers and software developers. The verdict came after a four-week trial initiated by Epic Games, the creator of Fortnite, which filed a lawsuit against Google three years ago, alleging anticompetitive practices. Google’s Play Store collects a commission ranging from 15% to 30% on digital transactions within apps, similar to Apple’s App Store.
The jury’s decision dealt a blow to Google’s Play Store, contrasting with Apple’s victory in a similar case brought by Epic against the iPhone app store, which is currently under appeal. Despite Google technically allowing Android apps to be downloaded from different stores (unlike Apple’s restriction on the iPhone), the jury found that Google has abused its power to stifle competition within the Play Store.
Epic Games CEO Tim Sweeney celebrated the verdict, calling it a “Victory over Google!” on social media, while Epic hailed it as a win for all app developers and consumers globally. Google, however, plans to appeal the verdict, emphasizing that Android and Google Play offer more choice and openness than other major mobile platforms. The decision could have significant financial implications for Google, potentially costing billions in annual profits generated from Play Store commissions.
The trial involved arguments from both sides, with Epic’s lawyer portraying Google as a ruthless bully using a “bribe and block” strategy to discourage competition, while Google’s lawyer criticized Epic as a self-interested game maker attempting to save money and undermine the Android ecosystem. Key witnesses during the trial included Google CEO Sundar Pichai and Epic Games CEO Tim Sweeney.
The court’s decision raises questions about the future of app store practices and antitrust concerns within the tech industry. The judge will now determine the actions Google must take to address the anticompetitive behavior found in the Play Store, with potential hearings scheduled for January. Additionally, another major antitrust trial involving Google’s relationship with Apple in online search is ongoing in Washington, further challenging Google’s dominance in the tech industry.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/12/12/googles-android-app-store-benefits-from-anticompetitive-barriers.html
