Google’s loss in the Epic case—a federal jury yesterday found unanimously that Google’s rules for the Android Play Store broke U.S. antitrust law—is seismic stuff for multiple reasons.
Firstly and somewhat incredibly, this is the first time a Big Tech firm has lost an antitrust case in the U.S., as competition wonk Matt Stoller pointed out in a blog post yesterday. Antitrust cases have obviously effected change in the sector before—see Microsoft’s 2001 settlement with the Justice Department—but this is different. The verdict may eventually have a broader impact across Silicon Valley, though right now it’s Google’s problem.
Stoller: “Google is likely to be in trouble now, because it is facing multiple antitrust cases, and these kinds of decisions have a bandwagon effect. The precedent is set, in every case going forward the firm will now be seen as presumed guilty, since a jury found Google has violated antitrust laws. Judges are cautious, and are generally afraid of being the first to make a precedent-setting decision. Now they won’t have to. In fact, judges and juries will now have to find a reason to rule for Google.”
Here's another key point from that piece, relating to the wider implications of nailing Google over “tying”—the antitrust issue that was also central to that vintage Microsoft case: “The specific legal claim here was about how Google forced firms relying on its Google Play app store to also use its Google Play billing service, which charges an inflated price of 30% of the price of an app. Tying is pervasive throughout the economy, so you can expect more suits along these lines.”
More specifically—but no less dramatically—Epic CEO Tim Sweeney may now get his desired outcome of the court forcing Google to let the games firm bypass the Play billing system in the U.S., when selling its games.
That’s not yet a sure thing, as Judge James Donato still needs to decide on the remedies he’s going to impose on Google, which is going to appeal the verdict anyway. But it’s going to be really hard for Google to claim that such an opening-up of the Android ecosystem is out of the question, given that it’s going to have to make similar changes elsewhere very soon.
As of early March 2024, Big Tech services that the European Commission has designated as “gatekeepers” will have to comply with tough new competition obligations contained in the minty-fresh Digital Markets Act. Both Android and Google Play have been designated, which will vastly boost the viability of third-party app stores that could charge far lower commissions than Google’s 30%. In the case of Apple, it will force the company to allow third-party app stores for the first time, with the same ultimate effect. Maybe Sweeney will even get the cross-platform gaming app store he's been advocating for.
The European app scene is going to look very different in a year or two, and now Americans are closer to being able to enjoy the same changes. More news below.
David Meyer
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