Epic Alleges Google's "Bribe and Block" Monopoly Strategy in Trial Opening

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ICARO Media Group
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08/11/2023 22h47

In the ongoing legal battle between Epic Games and Google, Epic has presented its opening arguments, accusing Google of creating a monopoly in Android app distribution through its Google Play Store. The trial, taking place in the San Francisco federal courtroom, has shed light on Google's alleged "bribe and block" strategy, where it pays competitors to refrain from launching alternative Android app stores.

According to Epic attorney Gary Bornstein, the Google Play Store accounts for 90 percent of all Android app downloads, resulting in a staggering $12 billion in profit for Google. Bornstein claims that Google has achieved and maintained this dominance by offering financial incentives, or bribes, to potential and actual competitors, effectively eliminating the possibility of a competitive Android app store market.

One such competitor mentioned in Epic's opening statement is Riot Games, the maker of popular game League of Legends. Epic alleges that Google made undisclosed payments to Riot Games to prevent the launch of a rival app store. While Google's attorney, Glenn Pomerantz, maintains that Riot Games is free to create its own Android app store, he dismissed the term "bribe," characterizing the payments as part of Google's efforts to gain the support of app developers.

Pomerantz also pointed out that Google faces competition from the pre-installed Galaxy Store on Samsung Android phones. However, despite the availability of alternative options, Google argues that the majority of Samsung users still choose the Google Play Store due to its superior user experience.

Epic's opening statement also highlighted its experience in trying to sideload its popular game Fortnite on Android devices. Bornstein described how Android users faced warnings about the app being "unknown" and potentially dangerous, which hindered its sideloading popularity. This, according to Bornstein, illustrates Google's advantage in the Android app market, comparing it to running on a smooth track while others navigate quicksand.

Responding to accusations of monopoly, Pomerantz argued that Google is not a monopolist because it faces strong competition from Apple and other market players. The attorney emphasized the importance of the quality of apps in an app store, stating that it cannot be separated from the quality of the phone itself, which means Google and Apple compete against each other.

Regarding the 30 percent fee charged to developers on the Google Play Store, Pomerantz described it as a market fee rather than a monopoly fee. He highlighted that Epic Games, like other platform holders, pays a similar fee to the likes of Nintendo, Microsoft, and Valve. Additionally, Google pointed out that Epic Games Store's own 12 percent fee is partly a charge for access to its audience, suggesting that a higher market-based fee could be justified for the Google Play Store.

Witnesses expected to testify in the trial in the coming months include Epic CEO Tim Sweeney, Alphabet CEO Sundar Pichai, Alphabet CFO Ruth Porat, and Android co-founders Andy Rubin, Nick Sears, and Rich Miner.

As the trial continues, the outcome will have implications not only for Epic and Google but also for the wider app store ecosystem and competition within the Android market.

The views expressed in this article do not reflect the opinion of ICARO, or any of its affiliates.

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