For two months, Google has squared off against the Justice Department in court in Washington over claims that the company is abusing its dominant position in online search and advertising to crush rivals, a high-stakes antitrust case that could reshape the world’s most popular search engine. Now, it’s facing another legal challenge closer to home.
On Monday, Epic Games, the company behind the hit game Fortnite, will appear in federal court in San Francisco to kick off a monthlong trial in its own antitrust lawsuit against Google. Epic is expected to argue that Google is violating both state and federal antitrust laws — as well as its founding principle, “Don’t be evil” — by wielding monopolistic power over app developers on its Google Play Store on Android mobile phones.
“Google has relegated its motto to nearly an afterthought, and is using its size to do evil upon competitors, innovators, customers and users in a slew of markets it has grown to monopolize,” Epic wrote in its complaint, which was first filed in 2020. The video game developer had tried to bypass the Play Store’s fees by letting Fortnite players pay Epic directly for in-app items, prompting Google to bar the game from the store.
If Epic wins, Google could be forced to alter its restrictive Play Store rules, allowing other companies to offer competing app stores and making it easier for developers to avoid the cut it collects from in-app purchases. Google generally takes a 15 percent fee for customer payments for app subscriptions and 30 percent for purchases made within apps that are downloaded from the store. (The company says 99 percent of developers qualify for a fee of 15 percent or lower on in-app purchases. Larger app makers like Epic must pay 30 percent.)
The simultaneous antitrust suits underscore how Google is playing defense on multiple fronts as regulators and competitors try to chip away at its influence over the internet.
Part of a wider effort by tech regulators in recent years to curb the ever-increasing power of Big Tech, the lawsuits are potentially damaging distractions for Google when it is trying to focus on competing with Microsoft, OpenAI and others in the emerging field of generative artificial intelligence.
“It’s hard to imagine Google makes it out of the gauntlet” unscathed in the next year, said Paul Swanson, an antitrust lawyer from the firm Holland & Hart. “At some point with this many cases, one breaks against you.”
Even so, Epic faces an uphill battle. It brought similar claims against Apple in a 2021 trial that featured squabbling over a cartoon Fortnite banana and the first court appearance by Tim Cook as Apple’s chief executive, but a federal judge rejected most of Epic’s arguments.
This trial has key differences that make Epic think it has a shot. For one, the case will be decided by a jury rather than a judge. Epic also will point to what it believes are damning pieces of evidence, arguing that Google forced phone makers like Samsung to pre-install and promote its apps on their devices. It will argue that a Google program called Project Hug paid off some developers so they would continue using Google’s payment system. Epic is also being countersued by Google, which is seeking damages.
Mr. Swanson said a jury trial could be beneficial for Epic.
“Google faces a much larger risk when they are up against a bunch of normal folks who are assessing their behavior versus judges assessing the behavior through a lens of a century of antitrust jurisprudence,” he said.
Over time, the antitrust claims against the Play Store have been whittled down to a one-on-one confrontation between Google and Epic. In 2021, dozens of state attorneys general sued Google on similar grounds. Google reached a tentative settlement with the group in September. On Tuesday, Google also announced a settlement with Match Group, the dating app company, which had joined Epic’s case.
“Epic wants all the benefits of Android and Google Play without having to pay for them,” Wilson White, a Google vice president of public policy, said during a briefing with reporters. “The lawsuit would upend a business model that has lowered prices and increased choices.”
In 2020, Epic antagonized Google and Apple by encouraging its customers to sidestep the tech giants and pay Epic directly for purchases made in Fortnite, the animated battle royale game. That was a violation of both companies’ rules, so they kicked Fortnite out of their app stores.
Epic responded with lawsuits and a public relations blitz that focused on Apple. Fortnite was still available on Android phones because Google allows a practice called sideloading — downloading apps from the internet outside a phone’s app store.
Epic is expected to argue that Google has made life tough on both Android phone users and app developers through a variety of means. Sideloading, Epic will argue, is an arduous process that most phone users struggle with, meaning that Google can maintain de facto control over what apps are on its phones through its Play Store restrictions. Samsung also offers an app store on its Android devices.
Google’s chief executive, Sundar Pichai, and Epic’s, Tim Sweeney, are expected to testify.
This week, Mr. Pichai testified in the Justice Department’s flagship antitrust suit against Google’s search engine. The department and attorneys general from dozens of states accuse Google of crushing competition by paying Apple, Samsung and other partners billions of dollars annually to keep its search engine the default on their web browsers.
Google says that it obtained the default positions because it has a superior product, and that its rivals have failed to invest in search.
In addition to Mr. Pichai’s appearance, the case has included testimony from Google employees and executives from some of its competitors, including Microsoft’s chief executive, Satya Nadella. A ruling is likely to come in 2024.
A federal judge in Virginia is considering a separate Justice Department lawsuit accusing Google of illegally abusing its monopoly power over the technology that delivers ads online. A trial in that case could begin as soon as next year.
David McCabe
