Google and Apple app stores under threat after federal jury rules in favor of Fortnite game makers in landmark antitrust case over fees charged by Big Tech

A federal court jury has decided that Google's monopoly on the Android App Store was anticompetitive in a way that harmed smartphone consumers and software developers.

The unanimous verdict handed down on Monday is a blow to a key pillar of the tech empire and came after a four-week trial of a lucrative payment system in Google's Play Store.

Both Google and Apple charge a 30 percent fee for apps and in-app purchases and restrict companies from helping users find cheaper options elsewhere.

The stores are the main place where hundreds of millions of people around the world download and install apps. This particular case focused on smartphones powered by Google's Android software.

Epic Games, the maker of the popular video game Fortnite, filed a lawsuit against Google three years ago, alleging that the Internet search giant abused its power to shield its Play Store from competition to protect a gold mine worth billions in generates income. dollars per year.

Much like Apple does for its iPhone app store, Google collects a commission ranging from 15 to 30 percent on digital transactions completed within apps.

Apple prevailed in a similar case brought by Epic against the iPhone app store, but that 2021 lawsuit was decided by a federal judge in a ruling that is being appealed to the U.S. Supreme Court.

Apple, which offers its nearly 1.5 billion iPhone users access to nearly two million apps, has faced years of criticism and lawsuits over its 30 percent tax on all digital goods and services.

Yet few consumers are aware that they can find it cheaper elsewhere, as Apple guidelines prevent apps from offering them this option.

Companies are not allowed to offer iPhone users any other way to pay – such as external links or QR codes – and must go through Apple.

Google, which owns YouTube, has also been criticized for imposing a similar levy of up to 30 percent on services in the Play Store for Android devices.

The nine-member jury in the Play Store case apparently saw things through a different lens, even though Google technically allows Android apps to be downloaded from various stores – an option that Apple bans on the iPhone.

Just before the Play Store trial began, Google tried to prevent a jury from determining the outcome, but its request was denied by U.S. District Judge James Donato.

It is now up to Donato to determine what steps Google will have to take to end its illegal behavior on the Play Store.

The judge has indicated that he will hold hearings on the matter in the second week of January.

Epic CEO Tim Sweeney broke into a wide grin after reading the verdict, slapping his lawyers on the back and also shaking hands with a Google lawyer, whom he thanked for his professional attitude during the proceedings.

'Victory over Google!' Sweeney wrote in a message on X. Epic Games called the verdict “a victory for all app developers and consumers around the world.”

Google plans to appeal the ruling.

“Android and Google Play offer more choice and openness than any other major mobile platform,” said Wilson White, the company's vice president of government affairs and public policy.

Depending on how the judge implements the jury's verdict, Google could lose billions of dollars in annual profits from Play Store commissions.

The company's main source of revenue – digital advertising tied mainly to its search engine, Gmail and other services – will not be directly affected by the outcome of the trial.

The jury reached its decision after listening to two hours of closing arguments from attorneys for opposing sides in the case.

Epic lawyer Gary Bornstein has portrayed Google as a ruthless bully using a 'bribe and block' strategy to discourage competition against its Play Store for Android apps.

Google lawyer Jonathan Kravis attacked Epic as a self-serving game maker trying to use the courts to save itself money while undermining an ecosystem that has spawned billions of Android smartphones to compete with Apple and its iPhone.

In his closing argument for Epic, Bornstein blasted Google for exploiting its power over Android software in a way that “has led to higher prices for developers and consumers, but also less innovation and quality.”

Google has staunchly defended the commissions as a way to recoup the more than $40 billion it has poured into building the Android software it has been giving away to manufacturers since 2007 to compete with the iPhone.

“Android phones can't compete with the iPhone without a great app store,” Kravis claimed in his closing argument. “The competition between app stores is linked to the competition between phones.”

But Bornstein ridiculed the idea that Google and Android would compete with Apple and its incompatible iPhone software system.

“Apple is not the get-out-of-jail-free card that Google wants,” Bornstein told the jury.

Google also pointed to competing Android app stores, like the one Samsung installs on its popular smartphones, as evidence of a free market.

Combined with the rival app stores that come pre-installed on other companies' devices, more than 60 percent of Android phones offer alternative outlets for Android apps.

However, Epic presented evidence that supported the idea that Google welcomes competition as a pretext, citing the hundreds of billions of dollars it has doled out to companies, such as game maker Activision Blizzard, to discourage them from opening competing app stores.

In addition to these payments, Bornstein also urged the jury to take into account Google's “scare screens” that appear and warn consumers of potential security risks when they try to download Android apps from some of the Play Store alternatives.

“These are classic anti-competitive strategies used by dominant companies to protect their monopolies,” Bornstein said.