Epic Games, the game studio behind the popular online multiplayer game Fortnite, has dropped an antitrust case against Google that could reshape the app market.
Epic Games first filed its lawsuit at the US District Court in California’s Northern District back in 2020 after Google booted its battle royal game from the Play Store for attempting to circumvent the Android app marketplace’s in-app payment policy to avoid paying associated fees.
Epic Games Sues Google For Exploiting Developers and Charging Fee For In-App Purchases
Leading to the events, Epic Games had launched a new system called Project Liberty, which was a plan to go around the in-app payment policies of the Apple App Store and Google Play Store. The company updated the Fortnite app and encouraged players to pay for items purchased in-app directly through the Epic website rather than using Apple and Google’s in-app payment gateways.
Project Liberty took a wrong turn after both tech giants accused Epic of violating developer terms of their respective app stores, leading to the removal of the Fortnite app. This meant both Android and Apple users could no longer download the game from the App Store or Google Play Store.
While the US Supreme Court is set to review Epic’s case involving Apple soon, the company has come out with fresh arguments to support its legal precedent against Google.
Epic’s lawsuit targets the Google Play Store, accusing the platform of attempting to maintain an illegal monopoly over Android app distribution. The suit is focused on Google’s fee structure for in-app subscriptions and one-off transactions, and other terms and conditions that seem to exploit app developers such as itself.
Google Reaches Settlement with Related Parties in the Antitrust Case, Including US States and Tinder
36 US states and Washington DC sued Google over the same issue, arguing that the 30% commission charged by the company for in-app purchases was anti-competitive. The case against the Silicon Valley giant initially involved a wide range of plaintiffs, including state attorney generals, individual consumers, Epic Games, and Match Group – the company that owns online dating apps such as Tinder, Match.com, Hinge, and OKCupid.
However, Google successfully managed to reach settlements with the opponents it would have otherwise faced in court, resulting in the case narrowing down to a one-on-one battle between Epic Games and Google.
On October 31, Match announced in its Q3 earnings letter that it agreed to drop the lawsuit against Google and will implement the company’s User Choice Billing system that will allow it to divert users to third-party in-app transactions.
Google’s User Choice Billing does not totally exempt apps from Play Store fees, rather it reduces the amount by 4%. This means developers would still have to pay an 11% subscription fee and a 26% fee on transactions made outside the Play Store.
Google Claims Epic is Taking Advantage of its Play Services Without Paying
Several high-profile individuals from both Epic Games and Google are now set to testify in front of the jury, including Alphabet CEO Sundar Pichai and Epic CEO Tim Sweeny.
The Epic Games chief accused Google of controlling, surveilling, and taxing transactions between users and developers on the Play Store, which he alleges to be a violation of US antitrust laws. Google responded by arguing that Epic simply wants all the benefits that Android and Google Play provide, including access to 2.5 billion users worldwide, without having to pay for them. The company said Epic’s victory in the lawsuit could harm Google’s ability to offer a competitive alternative to Apple’s App Store and iOS.
Wilson White, the vice president of public policy and government affairs at Google, said the company will showcase to the jury how Android has helped create more “choice, flexibility, and openness” to developers than any other platform, and that Epic has taken full advantage of that level of “choice and flexibility”. He added that Epic’s claims are needless and “should fail”.
Epic Says Google Offered Developers Millions to Make Their App Play Store Exclusive
Meanwhile, Epic argued that Google’s claims that developers have no other choice but to distribute their apps through the Play Store are false because the company allows Android apps to be downloaded through third-party stores or directly from developers’ websites. Epic cited that this was how it had been distributing Fortnite to users since Google decided to remove it from the Play Store three years ago.
In court filings that were redacted but later unsealed by Judge James Donato, Epic claimed that Google was paying developers to keep them from jumping ship and splashed out millions to ensure that several apps remained exclusive to the Play Store. The company also claimed that Google offered it up to $208 million for three years to keep Fortnite on the Play Store.
Google is currently facing another high-profile antitrust lawsuit, this time against the US Department of Justice, which has accused the search giant of monopolizing online search.
Although Fortnite is banned on the Play Store, the app can still be downloaded on Android devices via a variety of non-Google channels such as from the Epic Games website or the Samsung Galaxy Store. Users can also play Fortnite through cloud gaming services by launching it on Xbox Cloud Gaming, GeForce NOW, and Amazon Luna.