In a high-stakes legal battle, Google appeared before an appeals court to challenge a jury verdict branding its Play Store as an illegal monopoly. The decision stems from a case initiated by video game giant Epic Games, which accused Google of abusing its dominant position in the Android app market. Google seeks to overturn the verdict and the penalties imposed, arguing that the trial's definition of the market was flawed.
The case was presented in the Ninth Circuit Court of Appeals, where Google's attorney, Jessica Ellsworth, outlined the company's objections. One of the central points of contention is the market definition used in Google's trial. Ellsworth argued that the case should not have been adjudicated by a jury, as Google had preferred a decision by a judge, similar to a previous trial involving Apple.
Epic Games, known for its popular Fortnite game, filed antitrust lawsuits against both Apple and Google on the same day in August 2020. While the case against Apple concluded with a different outcome, Google's situation escalated into a significant antitrust clash. U.S. District Judge Yvonne Gonzalez-Rogers had ruled in favor of Apple and defined both app stores as part of larger competitive markets.
The appeals judges expressed skepticism about Google's assertion that the market definitions should include Apple's app store. Judge Danielle J. Forrest emphasized that differences exist between Google's open Android ecosystem and Apple's more controlled 'walled garden.' Meanwhile, Judge Gabriel Sanchez acknowledged that regardless of Google's competition with Apple in operating systems, Google could still maintain a monopolistic ecosystem within its app store.
Epic’s attorney, Gary Bornstein, accused Google of trying to preserve a lucrative system that allows the company to charge high commissions ranging from 15% to 30% on in-app purchases. U.S. District Judge James Donato had imposed penalties to reduce these fees, but their enforcement is on hold pending Google's appeal. Under these penalties, Google would make its entire library of apps available to competitors, potentially driving down commission rates.
The focus of Monday's two-hour hearing was also on procedural issues. After disputes over who should decide the case, Judge Donato opted for a jury trial. Google had initially agreed to a jury trial while resolving related lawsuits but later sought a judge's decision after settling some claims. This decision, however, was not agreed upon, raising procedural questions in the appeal.
Google's lawyer, Ellsworth, noted that Judge Donato's written verdict in the Apple trial was significantly more detailed, spanning nearly 200 pages, compared to the brief jury verdict against Google, which defined a relevant market with minimal input. Bornstein, representing Epic, maintained that Google’s vast market power should not receive the benefit of doubt to extend its profitable practices.
As the appeals court deliberates, it may opt for a detailed review akin to Judge Donato's extensive analysis in the Apple trial. Alternatively, it could send the case back for further consideration. The outcome could have far-reaching implications, potentially reshaping the landscape of app distribution and regulation in the digital economy.
Beyond the Play Store battle, Google faces additional antitrust challenges. In another case, a court ruled that its Chrome browser and search engine constitute an illegal monopoly, potentially mandating divestiture. These cases underscore the growing scrutiny over the tech giant’s business practices as regulators worldwide intensify their focus on Big Tech’s market dominance.