Epic Games Champions Antitrust Victory Over Google in Bold Legal Showdown

Epic Games submitted its latest response to Google’s appeal regarding its guilty verdict in the antitrust trial concerning the management of the Google Play Store.

Epic Games has been embroiled in legal disputes with Google ever since the latter (and Apple) took down Epic’s Fortnite battle royale game from the Google Play Store following Epic Games’ antitrust lawsuit in 2020.

“This case represents a reckoning that has been long overdue. The trial record is filled with evidence of Google’s prolonged strategy to inhibit competition among app stores and payment systems within the Android ecosystem,” Epic Games stated in its legal submission over the weekend. “Internal documents from Google elucidate the ‘blend of strategies’ employed by Google, as it believed ‘competing on price…is likely to result in a race to the bottom.’”

Epic accused Google of obliterating evidence pertinent to the case, stating, “Notwithstanding Google’s deliberate destruction of evidence and its attempts to conceal through what its lawyers referred to as ‘fake privilege,’ the trial revealed numerous ways in which Google systematically hindered any chance for rivals to compete.”

Google has refuted accusations of antitrust violations and is contesting its legal defeat in court. A year prior, a jury concluded that Google breached antitrust regulations by cutting off Epic Games during the legal proceedings.

This outcome contrasted with the antitrust lawsuit filed against Apple, where Epic was largely unsuccessful. In that litigation against Apple, Epic secured a victory on only one matter — that application and game developers should be permitted to promote their alternative stores with lower prices within their apps on the Apple app store.

However, in this case, the jury determined that Google had unlawfully coupled its app store with its billing payment service. Much of the case hinged on evidence linked to the “Project Hug” agreements, where Google compensated game developers for not competing with its app store, a move deemed anticompetitive by the jury.

Among other issues, Google mandated all Original Equipment Manufacturers (OEMs, the entities that produce smartphones) making Android devices to favor its app store (known as Google Play) and compensated the majority of OEMs for complete exclusivity, as noted by Epic.

Epic alleged that Google compelled all OEMs to implement technical and additional barriers (often referred to as “friction”) to deter users from acquiring applications outside of Google Play. Google financially incentivized app developers to withhold exclusive content from competitors of Google Play, while also compensating potential rivals to refrain from establishing competing app stores. After suppressing rival app stores, Google insisted that developers utilizing Google Play also adopt Google’s own payment solution (named Google Play Billing), which imposed an exorbitant fee, Epic stated. Consequently, merely 3% of Android devices in the United States have successfully installed a competing app store. Aspiring competitors—from small innovators to large corporations like Amazon—have been excluded, as per Epic’s allegations.

On the strength of substantial evidence of Google’s misconduct, after a 15-day trial, a jury unanimously found Google liable for illegal trade restrictions, monopolization, and tying, Epic asserted.

Following the verdict, the district court engaged in a remedy process that extended over several months, encompassing extensive written submissions from the involved parties, including factual and expert witnesses. The court conducted two evidentiary sessions, during which it heard testimony from Google fact witnesses and six expert witnesses. It then issued an injunction that reflected contributions from both sides, accepting and rejecting certain proposals from each party. The injunction aims to halt Google’s unlawful actions and address their ongoing negative effects while allowing Google to compete based on merit—and it will expire in just three years, Epic claimed.

In its appeal, Google reportedly has said little about its conduct. Instead, it lamented the fact that in a different case, with a different record concerning different actions by a different company (Apple), the results varied somewhat, according to Epic.

Epic further contended that Google’s criticism of the district court’s injunction is flawed. When a defendant transgresses antitrust laws, courts possess extensive discretion to formulate remedies that will terminate the unlawful conduct and prevent the offender from continuing to benefit from its malfeasance, Epic highlighted. The district court exercised this discretion judiciously, considering the severity and widespread impact of Google’s violations, while remaining mindful of the risks associated with intervention, Epic asserted.

Google’s claim that the district court “failed to consider” potential security concerns (Br.82) is also incorrect. The court explicitly expressed that “there are potential security and technical risks involved” with certain remedies and permitted Google “to engage in its regular security and safety processes.”

Epic stated that the trial evidence indicated Google had exploited security rationales as a facade for imposing anticompetitive restraints, and the jury inevitably determined that Google’s asserted security justifications were overshadowed by anticompetitive outcomes.

Consequently, Epic noted that the district court reasonably set limitations on Google’s future claims of “security” as a basis for resisting remedies (requiring Google to demonstrate that limitations on third-party app stores “were strictly necessary to ensure safety and security for users and developers”). Furthermore, the district court established that Google’s security concerns are exaggerated, Epic maintained.

Epic Games urged the appellate court to affirm the district court’s ruling. Additionally, due to Google having no likelihood of succeeding on the merits, its current stay motion should be promptly denied, allowing the injunction to begin offering advantages to consumers and developers while the court prepares its comprehensive opinion, Epic indicated.

We shall await Google’s responses to this matter.