Epic Wins Antitrust Case With Google
The jury unanimously answered “yes” to all 11 questions on the verdict form, indicating that Epic had proven those monopolies existed in every worldwide market except for China. Google “engaged in anticompetitive conduct” to establish or maintain the monopoly and illegally tied the Google Play store to the use of Google Play billing, according to the verdict. The jury also agreed with Epic’s arguments that programs like “Project Hug” and agreements signed with Android phone OEMs represented an “unreasonable restraint on trade,” harming Epic in the process.
With the verdict set, US District Judge James Donato will hold hearings next month to determine the best way to remedy Google’s anticompetitive monopoly power. During the trial, Epic did not ask for monetary damages but asked that it and other developers be able to introduce their own Android app stores and use their own billing systems on Android devices “without restriction.”
Sean Hollister (via Hacker News):
It’s a historic victory, particularly because Epic mostly lost its fight against Apple two years ago when Judge Yvonne Gonzalez Rogers decided that fight had nothing to do with apps.
But Epic v. Google turned out to be a very different case. It hinged on secret revenue sharing deals between Google, smartphone makers, and big game developers, ones that Google execs internally believed were designed to keep rival app stores down. It showed that Google was running scared of Epic specifically. And it was all decided by a jury, unlike the Apple ruling.
Lots of folks are surprised that Epic beat Google but not Apple, except for Stratechery readers.
“The big difference between Apple and Google is Apple didn’t write anything down. And because they’re a big vertically integrated monopoly, they don’t do deals with developers and carriers to shut down competition, they just simply block at the technical level,” Sweeney explained.
And have you ever tried to find anything in iMessage?
Over the course of the trial we saw evidence that Google was willing to pay billions of dollars to stifle alternative app stores by paying developers to abandon their own store efforts and direct distribution plans, and offering highly lucrative agreements with device manufacturers in exchange for excluding competing app stores.
These deals were meant to cement Google’s dominance as the only app store in town - and it worked. More than 95% of apps are distributed through the Play Store on Android.
Google imposes a 30% tax on developers simply because they have prevented any viable competitors from emerging to offer better deals. And Google executives acknowledged in Court that their offer of a 26% rate on third party payment options is a fake choice for developers.
Google said it would appeal. “We will continue to defend the Android business model and remain deeply committed to our users, partners and the broader Android ecosystem,” said Wilson White, vice-president of government affairs and public policy at Google.
[…]
The Supreme Court will decide in the coming months whether it will hear either or both of Epic’s and Apple’s appeals, but if it does not take up either petition, the previous rulings will stand.
See also: Damien Petrilli.
[We] have no idea what this will actually mean in practice. I’m still not quite sure what Epic even wants. Android already supports third-party app stores, and Epic already runs one. I think one thing Epic wants is to force Google to allow third-party app stores to be installed without any sort of warnings or friction, which would be a disaster for device security. […] The other thing Epic wants is to be able to use its own payment processing for apps distributed through the Play Store and Apple’s App Store.
I’d suspected a lot of the practices that Google had, you know, since 2018 or so when we first started this, to such an extent that some folks would occasionally call me a conspiracy theorist. It was really, really interesting to see that my understandings of what Google was doing behind the scenes were actually true — you’re leaking our conversations to reporters to get negative stories written about us; you’re paying other developers off to convince them not to launch their own stores; they were going around and paying carriers and OEMs secretly not to carry competing stores.
And when we tried to bundle Fortnite with other smartphone manufacturers like OnePlus and carriers of all sorts, they told us they couldn’t do a deal because Google had done a secret deal with them.
It was really disconcerting to see the extent of bad faith efforts that were going on in a company of Google’s size. You’d think a trillion-dollar company would develop to the point where they have pretty respectable processes and leadership structures that provide a check and balance against wrongdoing, but they were rampantly destroying all their chats on these topics.
The most interesting thing to me in this case is Epic refusing Google’s $150 million ‘offer’, and instead relying on the courts. Epic could have accepted that offer with zero risk, and been all the better off for it, with zero risk. Of course everybody else would be left behind. But by going all the way, and refusing the pay off, they instead make a better world for everybody.
Previously:
- Spotify’s Google Play Store Deal
- Apple Wins Antitrust Battle With Epic Games
- Google Accused of Violating Retention Obligations
- Court Documents About Epic v. Google and App Store
- Epic Sues Over Google Play Store, Too
Update (2023-12-22): Matt Stoller:
That said, Google is likely to be in trouble now, because it is facing multiple antitrust cases, and these kinds of decisions have a bandwagon effect. The precedent is set, in every case going forward the firm will now be seen as presumed guilty, since a jury found Google has violated antitrust laws. Judges are cautious, and are generally afraid of being the first to make a precedent-setting decision. Now they won’t have to. In fact, judges and juries will now have to find a reason to rule for Google.
[…]
Third, tying claims, which is a specific antitrust violation, are good law. Tying means forcing someone to buy an unrelated product in order to access the actual product they want to buy. The specific legal claim here was about how Google forced firms relying on its Google Play app store to also use its Google Play billing service, which charges an inflated price of 30% of the price of an app. Tying is pervasive throughout the economy, so you can expect more suits along these lines.
And finally, big tech is not above the law. This loss isn’t just the first antitrust failure for Google, it’s the first antitrust loss for any big tech firm. I hear a lot from skeptics that the fix is in, that the powerful will always win, that justice in our system is a mirage. But that just isn’t true. A jury of our peers just made that clear.
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I am glad this happened, and I will never understand how Gruber can be so stupid as to believe that having third party App Stores on iOS would be a "disaster for security". Either the OS is secure or it isn't. If it isn't then no amount of "review" of a binary is going to make the slightest iota of difference. I really wish he would stop commenting outside of his domain of competence.
> and I will never understand how Gruber can be so stupid as to believe that having third party App Stores on iOS would be a "disaster for security".
He didn't say anything about the mere presence of third-party app stores, and he didn't even mention iOS.
What he did say is it would a security disaster if Google allowed third-party app stores to be installed with no friction (i.e. no settings to change, no warnings, nothing, just tap on the website and the installation is done). This was in direct comparison to how it works today where you have to change a setting and view warning messages before it will be enabled.
I'm not going to comment on your remark about domain of competence.
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Anyway, what I really was going to reply to was "somenameforme"'s comment that "[Epic] instead make a better world for everybody." There is much to be said about dismantling Google (and Apple's) stranglehold over app stores; don't for one second believe Tim Sweeney is intentionally making things better for anyone other than himself.
Don't believe me? Listen to his own words. He has literally gone on record as envisioning Epic being at the center of all this commerce--not just Epic's games, but basically Google Play or Apple App Store with Epic's name on it instead. His company has literally paid billions of dollars to developers to release exclusively on Epic Games Store and skipping Steam.
It is insane to me that anyone would view this man as making anything better for the world in any way other than when it completely coincidentally coincides with making himself richer.
@Kevin
> His company has literally paid billions of dollars to developers to release exclusively on Epic Games Store and skipping Steam.
Is this illegal? Ot is it just a distribution deal?
Is it worse than Apple taking billions from developers and preventing them to advertise that their titles is available on other platforms?
"He didn't say anything about the mere presence of third-party app stores, and he didn't even mention iOS."
To be fair, he did say things like that in the past, though, e.g.: "many non-technical users would inevitably wind up installing undesirable apps via work/school requirements or trickery that they could not be required or tricked into installing today."
"What he did say is it would a security disaster if Google allowed third-party app stores to be installed with no friction"
Is Epic even asking for that? This whole argument seems like a complete strawman. Obviously, it would be stupid if you could just click on a link and you'd suddenly be running native third-party code on your phone. I haven't seen anyone asking for anything even remotely like that.
"His company has literally paid billions of dollars to developers to release exclusively on Epic Games Store and skipping Steam."
Well, yeah! That's what you get in a free market, you get competition between stores! That's the whole point of this!
> And have you ever tried to find anything in iMessage?
This made me laugh out loud.
For all the talk recently about blue bubbles it's easy to forgot what a huge silo iMessage is, and how archival hostile its apps are.
There is basically no good Apple approved way to get at old photos/messages. Search is poor. Like most of Apples stuff it has a nice glossy finish, but trying to use it for anything more than surface level features it becomes a horrible experience.
This has big "Android is Open, Appele is Closed" energy feeling doesn't it? Who was that Google guy back in 2010's who was always taking such potshots on stage in product announcements?
To me, Epic is worse than Facebook. I am a private tutor and education consultant and have lost track of how many kids I have encountered whose schooling has been ruined by all these nickel-and-diming games that cause them to waste critical time in their formative years on shit like Fortnite.
I am not dinging on all games, something like Monument Valley on iOS or Journey on PS3 are examples of fantastic games. This decision does nothing to help those guys does it? All it does (if it survives appeals) is allow Epic to reach into your pocket in addition to Google.
If Epic (and companies of its ilk) were to disappear off the face of the Earth tomorrow, it would improve things immeasurably, wouldn't it?
I've said this before, and I know it's unpopular here, but there should be only 1 App Store. I want to know where my transactions are going when I submit them. Maybe I'd feel differently if I was a "retail" developer, but I don't think so.
@DJ
> I want to know where my transactions are going when I submit them.
Why not. But I don't see why having trustworthy 3rd party app stores could be so difficult compared to having trustworthy brick-and-mortar stores or websites. They already exist, it's just that they are not allowed to run on iOS.
In response to me saying that Epic pays billions in exclusivity deals...
Someone: Is this illegal? Ot is it just a distribution deal?
Plume: Well, yeah! That's what you get in a free market, you get competition between stores! That's the whole point of this!
Paying billions for exclusivity is part of what Google did that Tim Sweeney is railing against on this very page:
> "you’re paying other developers off to convince them not to launch their own stores"
How is that different from "paying developers off to convince them not to launch their" games on stores that compete with EGS? Either it's OK or it's not.
And I will also direct you to my prior comment that Sweeney envisions Epic as completely replacing Google Play and Apple App Store. Not that it competes alongside them and other stores, but that Epic is the store.
> “What the world really needs now is a single store that works with all platforms,” Sweeney said in an interview in Seoul on Tuesday.
> Epic is working with developers and service providers to create a system that would allow users “to buy software in one place, knowing that they’d have it on all devices and all platforms.”
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Plume
> Is Epic even asking for [frictionless third-party app stores]?
It seems pretty clear to me that they are. They are on record stating one of the goals of the lawsuit is that they want Google to lower the barriers for third-party stores. They already have a third-party app store available on Android, so what else is there? Making it less scary and difficult to install it.
There is a big difference between:
"Phone and personal data are more vulnerable to attacks from unknown sources. You agree that you are solely responsible for any damage to your phone or loss of data that can result from using those apps | [CANCEL] [ALLOW]"
and
"You are about to install a third party application which we have not reviewed. Proceed? [Yes] [No]"
One is FUD, the other isn't, because it is a lie that your phone and data are safe if you only install applications from the official app-store. Only a correctly written operating system and perfect hardware can prevent data theft from other apps and damage to the phone.
Neither Google nor Apple's "App Store Review" can prevent 3rd party data theft or phone damage. Indeed, Apple is clearly unable to do this even for software their own engineers write for which they obviously have the source-code as NSO has demonstrated with its Pegasus product. Why anyone would think that an app reviewer with a high school education, given a binary and 6 minutes to test it, will do better than Apple's engineers is completely beyond me...
The truth is quite simple: both Android and iOS are so enormous that they are full of holes which people who you should be most worried about go through with ease, and the so called security provided by the App Store review is only money making security theater.
Even if you have a proven secure OS, like SeL4, hardware has holes, unintentional ones such as Row-Hammer and others.
As to knowing where your transactions are going, you are free not to only install third party software through the AppStore. If I only go to CostCo, I only get to buy from their selection of goods. It's up to you. But where you infringe on my freedom, is when you tell me I can only sell to CostCo.
If you want to go to Costco, you have to pay for a membership to buy into their ecosystem. In doing so, you agree to their rules: their stores are warehouses, so you have to be aware that they have forklifts running around; they have some great stuff, but you might have to buy in bulk; when you check out, you have to show your membership card; etc. When you leave the store, a cart reviewer will screen your cart. Some items may slip through this screening process, but it'll catch major things, and it acts as a deterrent to those who might fill up their carts and roll past the checkout without paying.
Companies may develop goods for the Costco ecosystem, and they may also develop those same goods for competing ecosystems, but goods provided for the Costco ecosystem must be paid for through the Costco store.
[Once again, twisting analogies to the Nth degree. Who's up for N+1? :-) ]
@Kevin
How is that different from "paying developers off to convince them not to launch their" games on stores that compete with EGS? Either it's OK or it's not.
I’m not sure whether it can or should apply in this case, but there is definitely precedent in antitrust law that the same action can mean different things when undertaken by different parties depending on whether the party has a monopoly. Or if you think about it in network neutrality terms, certain kinds of deals are not allowed depending on how low you are in the stack.
Sweeney envisions Epic as completely replacing Google Play and Apple App Store. Not that it competes alongside them and other stores, but that Epic is the store.
I think Sweeney means “one store” as in you buy the app once from a cross-platform store and it works everywhere. This would only replace the Google Play Store and App Store to the extent that developers choose not to make their products available in those stores. That’s the competition part.
@DJ: Sure you can twist what I said, but I don't think it helps comprehension. CostCo sells products that are not exclusive to them.
"Paying billions for exclusivity is part of what Google did that Tim Sweeney is railing against on this very page:"
Yeah, Google is using it to protect its monopoly. That's what makes it problematic. Having multiple stores competing for developers, on the other hand, is *not* problematic. It is, in fact, great.
That's an argument Apple users should be familiar with, because Apple did a lot of stuff that Microsoft could not do in the 90s and 00s, because one was a monopoly, and the other was not.
"It seems pretty clear to me that they are. They are on record stating one of the goals of the lawsuit is that they want Google to lower the barriers for third-party stores."
I'm sorry, but it's very difficult for me to believe that you're making a good-faith argument here if you're claiming that what Epic wants is for Google to allow users to run native code on their devices with a single click on a link on any website without any protection. I mean, it's plainly obvious that this is not what they are asking for.
Without really spending any time on it, I can come up with a bunch of ideas for how Google could make third-party stores more friction-less without making Android less secure than Windows 95:
- Allow App Stores in the Play Store
- Have a first-run experience similar to the browser chooser in Windows for App Stores
- Just ship Android with multiple App Stores installed
- Have a way to sign third-party App Stores with Google and install them frictionless from websites without also allowing all other APKs to install like that
