Alphabet Inc GOOGL GOOG received a legal setback on Monday after its search engine arm Google’s Android app store was ruled to have unfairly taken advantage of antitrust barriers, leading to detrimental effects on both consumers and software developers, according to a federal jury. The lawsuit was brought forward by Epic Games, the creators of the widely-known video game Fortnite.
What Happened: Following a four-week trial, the jury reached a unanimous verdict. The focus of the decision was Google’s Play store, which is used by hundreds of millions worldwide to download apps for Android smartphones, reported AP News.
The lawsuit was launched three years ago by Epic Games, who claimed that Google had been wielding its power to sustain a monopoly over the Play Store. Like Apple with its iPhone app store, Google collects a 15-30% commission on digital transactions made within apps.
Despite Epic losing a similar case against Apple, the nine-person jury in the Play Store case came to a different verdict. This decision was made despite Google’s policy of allowing Android apps to be downloaded from multiple stores, a flexibility that Apple doesn’t provide for the iPhone.
U.S. District Judge James Donato, who previously denied Google’s initial bid to prevent a jury trial, will now determine the appropriate measures for Google to correct its illegal behavior in the Play Store. Hearings on this are expected in the second week of January.
Epic CEO Tim Sweeney was seen grinning and slapping his lawyers on the back after the verdict. He also shook hands with a Google attorney, according to the report.
Why It Matters: Prior to the trial, Epic Games accused Google of employing “bribe and block” tactics to suppress competition within the Google Play marketplace. Epic’s attorney, Gary Bornstein, voiced that Google’s actions resulted in inflated prices, compromised quality, and fewer consumer choices, all while boosting Google’s profits.
Further context was provided when Google’s CEO Sundar Pichai admitted to deleting internal chats during a court proceeding. Pichai stated he sometimes labeled documents as “privileged” and didn’t disable a setting which resulted in internal chats being wiped after a day. This move has been under scrutiny by Epic Games, who called out Google Play Store’s policies as monopolistic.
Photo Courtesy: Shutterstock.com
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