Fortnite maker Epic Games takes on Google after it lost to Apple

Similarly to its lawsuit against Apple, Epic is alleging that Google had violated federal antimonopoly law by requiring developers of apps displayed in Google Play store to channel customer payments through Google, giving the internet giant a cut of revenue.

If Epic wins, it could mean more favorable terms for Android app developers. But that outcome is far from assured: Epic is going into the trial alone, after other plaintiffs dropped out. Last month, Match Group, the owner of dating apps Tinder and Hinge, dropped out as a plaintiff with Epic, after Google agreed for its users to make in-app purchases through other payment channels. A group of 52 state attorneys general reached a settlement with Google in September in a parallel case.

“Epic will go to trial against Google alone,” Epic chief executive Tim Sweeney posted on X, formerly Twitter, last Tuesday after Match Group dropped out. “We reject Google’s so-called ‘user choice billing’, in which Google controls, surveils, and taxes transactions between users and developers.”

Google contests the allegations from Epic, arguing that Google Play faces competition from the Apple App Store so it is not a monopoly and that requiring a cut of revenue from apps distributed through Google Play is a legitimate business practice.

“Epic simply wants all the benefits of Android in Google Play without having to pay for any of them,” Wilson White, vice president of government affairs and public policy for Google, told reporters in a briefing last week. Google had long taken a 30 percent cut of app purchases through Google Play, though in 2021 it reduced the amount to 15 percent for the first $1 million in annual revenue for an app developer.

Google chief executive Sundar Pichai and Andy Rubin, considered the founder of the Android mobile phone system, are slated to testify in court in the coming weeks, along with Sweeney. Epic said in a court filing that it is not seeking monetary relief, but a court order for Google to change its rules for app developers. “Epic likewise does not seek a side deal or favorable treatment from Google for itself,” Epic said in the filing.

The lawsuit stems back to the summer of 2020, when Epic revolted against demands from Apple and Google for a cut of in-app purchases by tweaking its Fortnite app so users could pay Epic directly. First Apple, then Google, booted Fortnite from their app stores for violating terms. Epic sued both companies in August 2020, arguing their rules violated the Sherman Antitrust Act.

The Apple case proceeded faster. A federal judge ruled in 2021 that Epic had failed to prove Apple was an illegal monopolist, though she did order Apple to open its App Store so app developers could “steer” customers to alternative payment systems. An appeals court upheld the ruling in April. Epic and Apple have both appealed to the Supreme Court.

Rebecca Haw Allensworth, associate dean for research at Vanderbilt Law School, said that Epic faced an uphill battle in proving that Google Play is a monopoly and that its conduct is aimed at retaining its monopoly, but that the case would bring some of Google’s practices to light regardless of the trial’s outcome.

“There’s value in that for the larger policy debate about how antitrust policy should change, even if Epic loses,” she said. “And there is always the chance that a jury will see it differently from how the court did in the Apple case.”

This is not the first legal challenge Google has faced over its app store. Last year, Google settled a lawsuit from app developers who felt the Google Play revenue-sharing terms were unfair. As part of the settlement, Google set up a $90 million fund for U.S. app developers who made less than $2 million in annual revenue between 2016 and 2021.

Google is also facing two antitrust cases filed by the Justice Department against its search and advertising technology businesses. Pichai appeared in a Washington court late last month as part of the defense against the first of those two cases.