Fans of Epic Games have a massive win to celebrate today. After 5 years, the Epic vs Google case finally ends with Epic winning out. In August of 2020, Epic Games filed a lawsuit on Google and Samsung in an antitrust suit believing that the two companies had been working against Epic by blocking third-party app stores. Three weeks ago, they had finally ended their lawsuit with Samsung. If you're not in the loop over the lawsuit, that article should get you up to speed on everything that has happened.
A three judge panel consisting of M. Margaret McKeown, Danielle J. Forrest, and Gabriel P. Sanchez sat in to call the verdict on the case. The entire legal document can be read here.
Judge M. Margaret McKeown begins with her opinion on the case as follows:
Quote From M. Margaret McKeown In the world of adrenaline-fueled survival that epitomizes the video game Fortnite, winners are decided in blazes of destruction and glory. By contrast, the outcome of this case—centered on Fortnite’s developer, Epic Games, and the Google Android platform—turns on longstanding principles of trial procedure, antitrust, and injunctive remedies.
Judge McKeown notes that despite the similarities of the cases on face value, the lawsuit against Google is very different from Epic's previous lawsuit against Apple due to the difference in business practices between Apple and Google as well as the fact that the two companies may compete for mobile gaming purposes, they do not compete for Android-only apps or in-app billing markets.
Quote From M. Margaret McKeown To begin, the commercial realities are different. Apple’s “walled garden” is, as the district court in Apple noted, markedly different from Google’s “open distribution” approach. 559 F. Supp. 3d at 1036–40. Google admits as much, noting that “Android’s open philosophy offers users and developers wider choices” than iOS does, even as that openness “limit[s] Google’s ability to directly protect users from encountering malware and security threats when they download apps.” As a consequence of its business model, Apple does not license iOS to other OEMs in the way that Google licenses Android to Samsung, Motorola, and other smartphone manufacturers. Indeed, because Apple manufactures its own phones, Apple effectively has no relationship with other OEMs. Apple’s “walled garden” also creates different dynamics in app distribution channels. Apple’s iPhones do not support any third-party app stores, and iOS disables direct downloads of apps from the web. See id. at 1005 (“Apple currently prevents direct distribution from the web using technical measures.”).
The theories of harm in the two cases are also different. Epic articulated theories of harm against Apple that it did not bring against Google. Because Apple vertically integrates its hardware, iOS operating system, and app store, a consumer locked in through any one part of the stack is, in effect, locked into the entire system. Therefore, numerous Apple-unique product features were relevant to Epic’s theory of harm—from the “stickiness” of iMessage to the overall “speed and reliability provided by iPhones”— because those features increased consumers’ switching costs. Id. at 957–60 (“Apple’s evidence strongly suggests that low switching between operating systems stems from overall satisfaction with existing devices, rather [than] any ‘lock-in.’”); see also, e.g., 4:20-cv-05640-YGR, Dkt. #616 (Epic’s opening statement), p. 11‒13. Epic also complained that Apple’s agreements with developers precluded Epic from distributing or creating third-party app stores—conduct not at issue in the Google litigation. At the time of trial, there were no competing app stores on iOS.
The difference in the markets also led Epic to articulate theories of harm against Google that were not brought against Apple. For example, Epic alleged that Google’s conduct—requiring OEMs to install Google Play on the home screen of every device the OEM makes—had harmed Epic. Because Apple does not license its operating system to other OEMs, this type of alleged anticompetitive behavior was simply not at issue in the Apple litigation. Epic also alleged that Google made deals to keep other app stores off OEMs’ home screens. Because Apple’s iPhones preclude third-party app stores altogether, these strategic dealings were not at issue. As Google’s attorney articulated in a 2023 hearing before the district court: “For . . . iPhones, there’s only one App Store. There always has been only one App Store. That’s not true in Android. So there’s a difference that already exists, a fundamental difference, an important difference for this case.” Nor—for much the same reason— was there evidence in the Apple litigation of alleged monopolistic agreements with app developers to refrain from offering their apps on any other app store, or evidence of Apple manipulating its operating system to deter direct downloads.
These are not fringe issues. These are the issues that formed the core of the market definition in each suit. As the district court noted, “[Epic] took a wholly different approach for the antitrust claims against Google, and offered wholly different evidence about relevant markets than that offered in the case against Apple.” Even Google’s own digital markets expert did not initially seek to define a market analogous, let alone identical, to the one that Apple sought in Apple or the market defined by the district court in that case.
It is of little consequence that Apple and Google were previously found to compete in the market for “digital mobile gaming transactions” in the Apple litigation. 559 F. Supp. 3d at 921. The Google trial focused on gaming within the Android ecosystem. That the markets in this case—for Android app distribution and Android in-app billing— overlap with or may constitute submarkets of the “digital mobile gaming transactions” market does not make them identical markets. Recognizing distinctions between overlapping markets is not “inherently contradictory.” Olin Corp. v. FTC, 986 F.2d 1295, 1301 (9th Cir. 1993) (establishing a relevant submarket for chemical compounds was not inconsistent with a broader market for pool sanitizers).
This framing also conforms to the real-world experience of overlapping markets and submarkets. For example, McDonald’s might compete against Chick-fil-A in the fast food market yet not compete against Chick-fil-A in the hamburger fast-food market (and instead compete with Wendy’s, Burger King, Sonic, and In-N-Out Burger). Although Google and Apple compete for mobile-gaming downloads and mobile-gaming in-app transactions, they do not compete in the Android-only app distribution and in-app billing markets, where Google competes against Samsung, Amazon, and others.
Google’s argument is further at odds with Section 2 of the Sherman Act, which prohibits monopolization of submarkets—“any part of the classes of things” forming U.S. trade or commerce—as much as it prohibits monopolization of broader markets. Ind. Farmer’s Guide Publ’g Co. v. Prairie Farmer Publ’g Co., 293 U.S. 268, 279 (1934) (emphasis added). As the Department of Justice (“DOJ”) Antitrust Division and the Federal Trade Commission (“FTC”) emphasize in their amicus brief, “[j]ust because parties compete in one market does not mean, as a matter of law, that there cannot be a narrower or overlapping market in which the parties do not compete.” This lesson follows Supreme Court guidance that “within [a] broad market, well-defined submarkets may exist which, in themselves, constitute product markets for antitrust purposes.” Brown Shoe Co. v. United States, 370 U.S. 294, 325 (1962). To conclude otherwise would effectively render a court’s definition of a given market a universal ban on antitrust action in any market within or overlapping that market. Consistent with the Supreme Court’s interpretation of the Sherman Act, we decline to hamstring antitrust jurisprudence in this way.
At bottom, Google’s preclusion argument fails due to the absence of an identical issue. The Apple litigation involved market realities and theories of anticompetitive harms that were separate and distinct from those involved in this case. Epic’s allegations against Google required an independent analysis to determine the relevant market. And the harm specific market definition applicable here was not “actually litigated” or “decided” in Apple. Love, 73 F.4th at 754.
McKeown awarded the final verdict in Epic's favor with the following closing statement:
Quote From M. Margaret McKeown As for Google’s suggestion that Epic has shown no risk of repeated injury caused by Play Store’s billing policies because “Epic has not distributed apps on Play for years,” we note that it was precisely Epic’s attempt to launch Fortnite on the Play Store that led to this litigation. And Google’s argument about the anti-steering provision is foreclosed by Apple. 67 F.4th at 972 (upholding injunction against anti-steering provision “because Epic is a competing games distributor and would earn additional revenue but for Apple’s restrictions”). Contrary to Google’s contentions, the district court specifically noted trial evidence showing “the anticompetitive nature of these anti-steering restrictions.” Those anticompetitive effects, if the restrictions were not enjoined, would continue to harm competition in the defined markets of Android in-app billing and Android app distribution, in which Epic is undisputedly a player. Nothing more is needed to fulfill the constitutional minimum for standing.
The ultimate scope of an injunction is reviewed for abuse of discretion and is based on the merits—“not
redressability.” Seattle Pac., 104 F.4th at 63. To the extent that Google challenges the district court’s exercise of discretion in crafting the injunction, we disagree. The nationwide prohibitions fit squarely within the district court’s “large discretion” to craft equitable antitrust remedies. Ford Motor, 405 U.S. at 573 (citation omitted). These remedies and their scope are supported by the record and the nature of the market, and we uphold them along with the liability verdict and the entire injunction.AFFIRMED.
Following Epic's victory in the lawsuit, Tim Sweeney tweeted to celebrate and to announce that Fortnite would be returning to the Google Play store, but no date was given.
Quote From Tim Sweeney Total victory in the Epic v Google appeal!
Quote From Tim Sweeney Thanks to the verdict, the Epic Games Store for Android will be coming to the Google Play Store! It's already available worldwide from our web site, http://epicgames.com.
Epic Games Store for PC already carries several other PC stores (http://itch.io, GOG Galaxy).
Google has, predictably, not taken kindly to their loss in the lawsuit and are still attempting to fight back. Little information is known about this other than a quote Lee-Anne Mulholland, Google's head of regulatory affairs, shared with The Verge.
Quote From Lee-Anne Mulholland This decision will significantly harm user safety, limit choice, and undermine the innovation that has always been central to the Android ecosystem. Our top priority remains protecting our users, developers and partners, and maintaining a secure platform as we continue our appeal.
It's also important to note that this lawsuit goes far beyond just Google and Epic, or even those two companies with Samsung or Apple. Judge James Donato issued on October 7th 2024 that Google must allow alternative app stores on Android devices, and until November 1st 2027, Google cannot pay or provide discounts to app developers for launching their apps exclusively on Google Play or preinstall Google Play on new devices. This means that Epic's victory over Google in the lawsuit is not only an important development for customers of either business, but essentially everyone as this dramatically increases the amount of freedom that everyone is allowed to have in what apps they can download. Even non-gamers who user their phones frequently may now notice a huge upsurge in the available apps and app stores.
What do you think about the results on the lawsuit? Will you be happy to get Fortnite on Google Play now or does it not really matter to you? Let us know your thoughts in the comments below.
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