SAN FRANCISCO (CN) — In opening arguments in an antitrust jury trial on Monday, lawyers for Epic Games — the company behind the hit game Fortnite — accused Google of using a strategy of “blocking and bribing” competition so that Google’s Play Store remained the dominant app store on Android phones.
The trial is expected to last until December in U.S. District Judge James Donato’s courtroom in San Francisco. If Epic wins, it could bring massive changes to the ways app stores function on Android phones. The gaming company is not seeking any monetary damages in the suit.
Epic sued Google in 2020, claiming that Google’s Play Store is a monopoly that drives up the price of apps by tying payments to the Google Play store, shutting down alternate stores and forms of payment. Epic claims this violates federal and state antitrust laws.
The litigation originally included Match Group, which owns dating app Tinder, and the United States, which settled before trial.
Epic’s 2020 suit came after Google and Apple kicked Fortnite off of their respective play stores when Epic deployed a hotfix to Fortnite that allowed users to purchase in-game currency directly through Epic at a discount, willfully violating Google and Apple’s rules, a deliberate move that Epic referred to as “Project Liberty.”
The gaming giant mostly lost a similar suit against Apple in 2021. That case is currently before the Supreme Court.
Gary Bornstein, counsel for Epic Games, said that Google takes a 30% cut of any in-app purchase, a percentage that Google knows is “too high.”
“The impact of these extraordinary fees is extraordinary profit,” Bornstein said.
This tax “has harmed consumers, who have less choice and pay more. It has harmed app developers like Epic, and it has harmed people who want to own their own app stores,” Bornstein said.
In addition to the tax, Bornstein said that Google paid competitors like Nintendo, Activision Blizzard and Riot Games to not have their own app stores. He claimed that when faced with competition, Google will immediately go to its “bribe or block'' strategy.
Bornstein also accused Google of paying phone manufacturers not to put competing app stores on Android phones, meaning that most Android phones will ship with only Google’s Play Store installed. Even though Google technically allows other app stores, it’s not a realistic option, according to Bornstein.
Google purposely makes it a laborious process for a user to download apps from any source other than Google Play on an Android phone. When a user tries, the process is long and filled with disclaimers discouraging users from using any store other than the Play Store, Bornstein explained to the jury.
Without competition, Bornstein said Google can raise fees and has no incentive to improve its products, stifling innovation and harming users.
“The law draws a line between fair competition and unfair competition. Google has crossed that line again and again. When there’s no competition, bad things happen,” Bornstein said.
Glenn Pomerantz, counsel for Google, told the jury that Epic doesn’t want to pay for the benefits it receives from having Fortnite on Google Play, which has billions of users. He said that Epic CEO Tim Sweeney agreed to Google’s terms and wants to change them for his own benefit.
Further, Pomerantz said Epic can sell Fortnite on Nintendo, Xbox and PlayStation game consoles, as well as other storefronts, proving that there is no monopoly.
“All of these choices that Epic has for distributing Fortnite … Those are all important choices. And they show why Epic can’t be right in this case,” Pomerantz said.
Pomerantz explained that most developers do not pay the 30% service fee to Google; it is reduced only to apps which have in-app purchases. He said that 97% of app developers pay no service fee, and of the 3% that do pay, 99% are eligible to pay 15% or less.
“Google makes money only when the developers make money; they only have to pay if they have the money to pay,” Pomerantz said.
Pomerantz said Epic’s conduct is hypocritical because it pays a 30% fee to Nintendo, PlayStation, Xbox and more.
“All of these stores charge Epic the same 30% fee. It’s a market fee, not a monopoly,” he said.
He said that the deals struck with Activision Blizzard and others were not bribes, but agreements to help get the latest games released on the Play Store at the same time as iPhone’s app store. Android’s competition is not app stores, Pomerantz said, but Apple. Without taking measures to ensure that apps get released simultaneously on iPhone and Android, Android cannot compete with Apple, Pomerantz said.
“Because Google faces strong competition from Apple and from others, it cannot be a monopoly,” Pomerantz closed.
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