Epic vs Google: Alphabet loses Google Play Store monopoly case, jury rules against ‘illegal monopoly’

In a significant development, a federal jury in California has ruled that Google’s mobile app store, the Play store, holds a monopoly in the market for program distribution and payments on its Android software.

The decision is a setback for Google in its high-stakes antitrust battle with Epic Games Inc. The jury found that Google willfully wields a monopoly through anticompetitive conduct in the operation of its Play store.

The verdict, reached after less than four hours of deliberation following a month-long trial in San Francisco, raises concerns for Google’s app store revenue, potentially jeopardizing billions of dollars.

US District Judge James Donato, overseeing the trial, will determine whether Google must allow alternative payment and app distribution methods outside its own app store in light of the ruling that Google Play policies are unlawful.

Epic Games, the maker of Fortnite, initiated a legal challenge against Google three years ago, alleging that the tech giant monopolized the Android app distribution market through exclusive deals with rivals and using its resources to stifle competition.

Google argued that its partnerships were aimed at helping Android-based phones better compete with Apple’s iPhone in the smartphone market.

Tim Sweeney, CEO of Epic, celebrated the ruling on social network “X.” The trial featured testimony from both Sweeney and Alphabet CEO Sundar Pichai, along with high-ranking executives from Google and antitrust law experts.

Confidential internal emails and presentations from Google were presented as evidence, providing insight into the company’s efforts to develop Google Play and its Android mobile operating system business.

Notably, Epic was the sole party challenging Alphabet at trial, as the company had recently reached settlements with consumers, state attorneys general, and Match Group Inc., who had all raised concerns about Google Play policies.

This ruling comes two years after Epic largely lost a similar antitrust challenge against Apple over its app store.

During the trial, Alphabet counterclaimed against Epic, alleging breach of contract and bad faith for attempting to establish its own app store in 2020 as a workaround to the Google Play billing system. However, the judge ordered the jury to skip ruling on Google’s counterclaims after Epic executives admitted to attempting to bypass the Play store.

The outcome of this case may have far-reaching implications for the broader landscape of app store competition and antitrust scrutiny in the technology industry. Legal experts and analysts, however, claim that Google is bound to appeal the ruling.

(With inputs from agencies)