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Epic Games’ Legal Victory Over Google Could Cost The Search Giant Billions

 |  December 12, 2023

A California jury ruled on Monday that the Play app store, owned by Google’s parent company Alphabet, operated as an illegal monopoly. The decision opens the door for potential changes in the Android mobile system, but experts caution that a lengthy appeals process could delay any alterations for years.

The jury’s verdict stated that Google’s Play Store hindered competition by imposing exorbitant fees of up to 30% on app developers, marking a stunning defeat for the company. This ruling grants Epic Games, the maker of “Fortnite,” an opportunity to submit a court filing outlining its vision for fixing the Play Store.

Pinar Akman, a professor of competition law at the University of Leeds, remarked, “This is a big win for Epic.” She suggested that a typical remedy could involve requiring Google to allow developers to use payment systems other than its own, potentially shaking up the entire ecosystem and business model.

Related: Epic & Match’s Antitrust Case Against Google Heads To Jury Trial November

Wells Fargo estimates that Google could face a significant financial impact, with approximately $10 billion in annual revenue from app sales and in-app purchases at risk. The current situation may force Google to reconsider its high-margin business model, where it takes a substantial cut from each digital purchase through the Play Store on Android.

Analysts speculate that potential remedies could compel Google to permit rival app stores or reduce the fees associated with app sales and in-app purchases. While digital purchase revenue represents only a fraction of Google’s total sales, the high-margin nature of this business segment underscores the importance of the legal implications on the tech giant’s financial landscape.

Source: Reuters