Charles J. Laurent
A federal court jury in San Francisco is about to begin deliberations in an antitrust trial that examines whether Google's app store for Android smartphones has been engaging in monopolistic practices that harm consumers and stifle innovation. The trial, brought forth by Epic Games, the creator of the popular Fortnite videogame, has spanned over four weeks.
Before the jury commences their deliberations, lawyers from both sides will present their closing arguments. Throughout the trial, testimony was given by Google's CEO, Sundar Pichai, and Epic's CEO, Tim Sweeney. Pichai, while occasionally hindered by a health issue, delivered explanations on complex subjects in a professorial manner behind a lectern. Sweeney portrayed himself as a passionate gamer on a mission to challenge a greedy tech giant.
Epic Games alleges that Google has taken advantage of its dominant position and control over the Android software, which powers the majority of smartphones worldwide. Specifically, Epic claims that Google has manipulated its Play Store to safeguard a lucrative payment system. Similar to Apple's model, Google collects a 15-30% commission from in-app transactions, resulting in considerable profits annually.
Google adamantly defends its commission structure, arguing that it enables them to recover the substantial investments made in building and distributing the Android software since 2007. Additionally, Google cites alternative Android app stores, such as the one installed on Samsung smartphones, as evidence of a competitive market.
Epic Games presented evidence challenging Google's assertion of fostering competition. They highlighted the considerable sums of money Google has paid to companies such as Activision Blizzard to dissuade them from establishing rival app stores. This suggests that Google may not be as receptive to competition as it claims.
Through this trial, the court seeks to shed light on the practices of Google's app store and determine whether they align with fair competition and consumer interests.
The smartphone app market is at the heart of the trial, where the verdict may hinge on how it is defined. Epic claims that Google's Play Store operates as a monopoly, driving up prices and stifling innovation, while Google argues that it operates within a fiercely competitive market that includes Apple's iPhone app store.
Google insists on competing against Apple in app distribution, despite relying on incompatible mobile operating systems. This brings attention to the intertwined relationship between the two companies, particularly in the realm of online search. Another major antitrust trial in Washington, set to conclude in May, centers around allegations against Google's abuse of dominance in the online search market. One of the accusations is that Google pays billions of dollars to secure its position as the default search engine on various devices, including the iPhone.
Unveiling evidence from both the San Francisco and Washington trials, it was revealed that in 2021 alone, Google paid a staggering $26.3 billion to ensure its search engine was the automatic choice on popular web browsers and smartphones. The lion's share of this amount went directly to Apple. Sundar Pichai, CEO of Google, confirmed that in 2021, Apple received 36% of Google's revenue from searches on the Safari browser—though the precise dollar amount was not disclosed.
Epic's lawsuit against Google's Android app store mirrors a previous case brought against Apple and its iPhone app store. However, Epic faced defeat on all major claims during the monthlong trial against Apple in 2021. The key difference now lies in who will ultimately decide the verdict; while the Apple trial was determined by a federal judge, a jury will decide the outcome of the case against Google.
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