Judge’s ruling against Google in Epic Games case highlights a shift in antitrust law

Google has faced a recent series of antitrust rulings that could cost the tech giant billions.

A California judge on Monday ruled that Google must open up Android to rival third-party app stores as part of a landmark antitrust case against the tech giant.

Management and law experts told B-17 the ruling highlights how antitrust law is being used against Big Tech companies — and could cost Google billions of dollars in lost revenue.

The ruling came after years of legal back-and-forth between Google and Fortnite developer Epic Games, which initially filed the suit in August 2020. Epic Games argued, and a jury ultimately agreed, that Google had violated antitrust policies in its Play Store for Android devices.

In December, that same jury found that the tech giant held a monopoly in its Play Store and artificially limited the reach of competitors’ apps, driving up prices for processing in-app purchases. Northern District of California Judge James Donato’s ruling on Monday established remedies to that monopoly: For three years, Google will not be permitted to pay companies to launch apps exclusively on the Play Store or pay them to preinstall the company’s app store on devices.

According to Peter Cohan, an associate professor of management practice at Babson College, the ruling could “cost Google tens of billions of revenue over the next three years” due to lost in-app payments and revenue that will go to competing third-party app platforms.

“In recent years, the government has been trying to countervail the high pricing power of dominant tech companies,” Cohan told B-17. “This fits into that shift.”

The Monday ruling in the case resulted in a disparate outcome compared to a lawsuit Epic Games filed against Apple in August 2020, which accused Apple of holding a similar monopoly with its App Store. The Apple case was decided in 2021 — and largely favored Apple, finding that the company had engaged in anticompetitive behavior in only one of 10 counts.

In the Apple case, Northern District of California Judge Yvonne Gonzalez Rogers’ only remedy was that Apple could not stop app developers from informing users that alternative payment systems other than the App Store existed to pay for in-app purchases.

Eric Chaffee, a professor of business law and technology at Case Western Reserve University School of Law, told B-17 that the Epic Games ruling — and a DOJ case against the company in a separate antitrust trial in which prosecutors are considering asking the judge to break up Google — underscores how the application of antitrust law has shifted in recent years against Big Tech companies.

“It seems like thinking about antitrust is evolving in the United States,” Chaffee said. Historically, he said, liberal judges tended to favor antitrust law more than conservative ones. But, these days, even “more conservative justices have come around to the notion that certain sorts of breakups of monopolies are positive things, especially in regard to technology — so in regard to that, this case is one to watch.”

Chaffee added: “It’s one of those things where we’re going to see potentially odd or unexpected lineups in regard to how the court ends up approaching these types of issues.”

When reached by B-17, a representative for Google pointed to a public statement about the ruling indicating that the company plans to appeal but declined to answer further questions.

“The Epic verdict missed the obvious: Apple and Android clearly compete,” Google’s statement reads, in part. “We will appeal and ask the courts to pause implementing the remedies to maintain a consistent and safe experience for users and developers as the legal process moves forward.”

Alden Abbott, former General Counsel for the FTC and senior research fellow with the Mercatus Center told B-17 he is skeptical that the injunction issued against Google will benefit consumers, as antitrust law is supposed to.

“Preventing Google from bidding for exclusive initial rights to host top games will artificially undermine Google’s competition with Apple,” Abbott said. “It may also reduce third-party incentives to invest in creating the best games in the hope of winning exclusivity. On both those counts — reduced competition with Apple and reduced incentives to enhance quality — consumers are likely to suffer.”

When Epic Games’ case against Apple was similarly appealed, the Supreme Court denied requests to hear it, leaving Apple with its partial victory.

Representatives for Epic Games directed B-17 to a public thread about the Google ruling, posted on X by the company’s CEO, Tim Sweeney.

“The Google Play Store injunction lasts for 3 years,” Sweeney wrote. “This means all app developers, store makers, carriers, and manufacturers have 3 years to build a vibrant and competitive Android ecosystem with such critical mass that Google can’t stop it.”