The 11th December — the day that Google lost its first antitrust trial. Epic Games, the company behind Fortnite, launched their litigation against the anticompetitive management of Google and Apple’s App Stores in 2020. Three years on, the California jury found against the Google Play monopoly. This verdict has huge ramifications for other ongoing antitrust trials against Google, such as the DOJ’s’ Search trial. But more crucially, now that Google has lost on liability, discussion must turn to remedies. How the US Courts deal with remediating Google’s app store monopoly will have sweeping ramifications across the technology industry; it is imperative that their remedies are informed and sophisticated.
The agreed germ of Epic’s case was the moment in 2020 when Google and Apple removed Epic from their app stores for trying to secure direct payment from users. The result of this case, three years on, is that the Court found Google guilty of using its app store to restrict apps.
The result of the Epic case will affect the technology ecosystem in four major ways: industry behaviour; regulatory body behaviour; public perception; remedies.
Firstly, the fact that Epic’s persistence has borne fruit will embolden other companies from within the industry to stand up to Google and Apple. Samsung balked at the possibility of launching litigation against Google in the late-2010s despite the solid legal grounds of their case. Perhaps, faced with the same dilemma now, Samsung would proactively battle for their rights rather than acquiescing to Google’s trade agreements.
Secondly, the Jury’s verdict will ballast the ongoing investigations made by regulatory agencies into Google’s anticompetitive behaviour, such as the DOJ’s Search and Ad-Tech cases. Nico Grant of the New York Times suggests that the Epic result might anticipate the outcome of Google faces in its ‘regulatory gauntlet’ next year. But Grant may, in fact, underplay the significance of the Epic case: the verdict could have a causal, rather than merely anticipatory, effect on regulators’ cases in 2024 if it emboldens judges to make precedent-setting judgements.
Thirdly, the snowball of evidence displaying Google’s anticompetitive behaviour — its deals with Apple and other major companies, its treatment of rivals, its gradual pivot towards a relentless pursuit of 20% year-on-year growth — will weaken the company’s public appearance. Google may become another victim of the maxim that it takes a lifetime to build a good reputation which can be lost in a day. As with Microsoft’s antitrust trial of the early 2000s, these proceedings also thrust Google into the court of public opinion. Google’s deletion of trial evidence functions as a particularly weighty contribution to public debate: the Judge described their practice as a ‘frontal assault on the justice system’ in an assessment that chimes with evidence that emerged in the USA v. Google case. It remains to be seen how the company’s reputation — or, indeed its share price — will respond to these proceedings.
The fundamental problem of app store architecture is a lack of interoperability. Google and Apple impose strict financial and software-based requirements on app developers; they have been able to run the app ecosystem as a duopoly because there has been no effective competition for app stores. This duopoly has forced developers to put up with artificially high prices — a result of the 30% commission — and ‘tying’, which describes how developers had to use Google and Apple’s payment services in order to have products on their app stores.
The remedies available in this case form the next stage of proceedings and they will need to satisfy the following condition: the Civil Law Remedy Standard is to put the person harmed ‘back in the position had the harm not occurred.’ It remains to be seen how Google might accomplish this requirement. The abolition of contractual restrictions on app behaviour looks to be a strong starting point which will help with future app store competitiveness. Yet the harm that has already occurred seems harder to redress and requires more sophisticated measures.
These issues highlight the need for an open, competitive online app store. Were an interoperable app store to exist, consumers could have access to developers’ apps without relying on gatekeeper platforms. The key benefit of such an arrangement would be an improvement in user-experience: prices for consumers would be lower since the 30% commission that Apple and Google charge would cease to be relayed.
As we enter a year in which Google and Apple face multiple competition lawsuits, it is vital that courts and regulators take a strong first step in terms of remedies. This is just the opportunity that the Epic case offers: a well-thought out interoperability remedy would prove the effectiveness of such a measure for tech platforms — and pave the way for further implementation over the next couple of years.
Please contact Tim Cowen if you have any questions regarding the above.
The material contained in this article is only for general review of the topics covered and does not constitute any legal advice. No legal or business decision should be based on its content.
This article is written in English language. Preiskel & Co LLP is not responsible for any translation of all or part of its content into any language.
 See, seriatim: https://www.justice.gov/d9/2023-10/417460.pdf where Google and Apple express their desire to work ‘as one company’; https://www.justice.gov/d9/2023-10/417199.pdf for Google’s elimination of Branch, a mobile search competitor; https://www.justice.gov/d9/2023-10/417391.pdf for evidence of how Google’s ‘“management” has held [the search team] to the 20% bar’.