Google’s Legal Loss Could Change the App Store


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Wondery I'm David Brown, and this is business wars daily on this December 18. Happy Monday, everyone. For three years, game maker Epic Games, that's the name behind Fortnite, has been battling Google in court. Well, last week marked an, well, an Epic legal win for the company. A jury found that Google violated antitrust laws in the way it runs its App Store, Google Play. It's a significant victory for app developers and could change the business model of the current app ecosystem. But let's back up just a bit, shall we? Epics Fortnite, a wildly popular multiplayer game, is free to play and available on nearly every software platform imaginable, according to TechCrunch and my kids. One of those platforms is Google Play, which is Google's app marketplace now. In 2020, Epic took Google to court, claiming that the way they run that marketplace is illegal.


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Epic argued that forcing app users to make payments through Google's own system, and not epics or other developers, violates antitrust law. When players use Google's payment system, Google obviously gets a hefty cut. And this, Epic argues, cuts into their revenues. And for the record, this isn't only happening to Epic because Google acts as the host of this app marketplace. It takes a cut of developers'revenues for any apps in the space. Well, last week, a jury took only a few hours to decide that, yes, Google's practices in its App Store were in violation of antitrust laws. Epic Games was thrilled with the verdict, which it counted as a win not just for its developers, but for all developers trying to distribute apps and games in Google's marketplace.


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The Verge reported that Epic CEO Tim Sweeney thanked the jurors after the trial, saying, quote, the 1 million game developers who couldn't be here, thank you, end quote. He also tweeted a joyful statement that began with victory over Google and ended with free fortnite. Now, you may be thinking, this all sounds a bit familiar, and that's because, dear listeners, this is not the first time Epic has taken a tech giant to court. The very same day it filed its Google lawsuit in 2020, Epic went after Apple for the very same reason. Like Google, Apple has its own payment platform in its App Store and restricts outside apps from using anything but Apple's own system. But in this case, a judge ruled mostly in favor of Apple, although it did force the company to allow developers to direct customers to alternative methods of payments.


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In September, both Apple and Epic asked the Supreme Court to weigh in on the case. That verdict is TBD. At the moment, Apple and Google differ in approach to their App Stores. Apple's is much more restrictive, while Google's, well, seems to offer developers a bit more wiggle room. And that wiggle room means that it wasn't immediately obvious that Epic would win its battle with Google. Because if you have fewer restrictions for developers, well, can you really be a monopoly? Ask the thinking. Well, the answer appears to be yes, you absolutely can. We should mention Google immediately said it would appeal the decision. As the technology in our pockets keeps innovating, so too will the ways in which we access our favorite apps.


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If Epic has its way, it's developers of these apps, and not the tech giants that host them, that will walk away with more money. But alas, these cases are slated to keep winding their way through the courts, which means the journey to a final decision may be long and definitely will be epic. From wondery this is business wars daily. I'm your host, David Brown. Written and produced by Jessica Yarmoski. Our executive producers are Tina Rubio and Marshall Lee.


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