Google has violated antitrust laws. That was the decision this week from a federal jury in San Francisco hearing the case between Epic Games and Google over whether the internet behemoth was extracting fees and limiting competition on its Play mobile store by forcing developers to use Google's in-app billing system, and charging between 15 to 30% for various purchases. To circumvent this, Epic Games, which makes the wildly popular Fortnite, broke Google's rules and allowed players to make in-app purchases directly with Epic. The fight was on.
"Victory over Google!" Tim Sweeney, Epic's CEO, wrote on X after the verdict was announced. "Thanks for everyone’s support and faith! Free Fortnite!" In a subsequent blog post, the company wrote that the verdict is "a win for all app developers and consumers around the world” and “proved that Google’s app store practices are illegal and they abuse their monopoly to extract exorbitant fees, stifle competition and reduce innovation.”
Google, however, contests that it's not possible for it to have a monopoly on the mobile ecosystem as the Apple App store (its main competitor) reigns supreme. The trial has "“made clear that we compete fiercely with Apple and its App Store, as well as app stores on Android devices and gaming consoles," Wilson White, Google's VP of government affairs, said in a statement, reports the New York Times.
To whit, this is not Epic's sole attempt at toppling the grip of Silicon Valley's titans on mobile devices. Two years ago, Epic lost a nearly identical case brought against Apple and its App Store, and now both the gaming company and iPhone maker are appealing the case to the Supreme Court.
"Google’s epic loss is much ado about nothing,” the investment firm Needham told CNBC. They added that, "[Worst-case scenario,] Google loses all appeals and must add competitors, though it’s unclear consumers would move. …Also, Google could charge new competitors to the Play store a revenue share of 15%+ so that the new competitors would have to charge consumers higher fees that includes Google’s ‘overhead’ charge.”
Alphabet Spells Monopoly?
While Alphabet (Google's parent company) defends itself against Epic, it is also embroiled in an antitrust case with the US Government. At its core is the question of whether Google's search engine dominance stifles competition and hurts consumers by providing a worse product. In recent court proceedings, it was revealed that Google has an ad revenue-sharing deal with Apple in exchange for "making Google’s search engine the default for Safari and use Google for its voice-activated assistant service Siri," reports Yahoo Finance. The deal nets Apple between $8-$12 billion, or 15 to 20% of its annual global income. Prosecutors argue that such deals deny consumers search engine options, and give Google and unfair advantage.
THE VERDICT:
Biggie was right when he said "mo' money, mo' problems." Google has become a verb, and nearly synonymous with the Internet itself. It should come as no surprise then that the company is facing multiple court challenges and antitrust suits. But even with that said, it remains unlikely that Alphabet will dissolve or be broken up, and unlikelier still that Google will lose its place at the heart of the Internet.
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