Google’s defeat in its antitrust battle with Epic Games was a landslide victory for the maker of Fortnite and a major upset for the business model underpinning the mobile app ecosystem, where platforms host app stores and then take a cut of developer revenue. But what does the ruling actually mean, at least in the near term, for app developers? This is something that remains to be seen, as the case will not be over until the judge issues a decision on what specific penalty Google should impose.
A San Francisco jury on Monday returned a summary verdict in Epic’s favor within hours — not days or weeks — finding that Google “intentionally acquired or maintained monopoly power by engaging in anticompetitive conduct.” The court filing states that. But while the jury determined liability in this case, it is still up to the judge to decide the remedy. This means that the two parties will still be able to take their cases to court later in January in hopes of determining how Google will need to adjust its operations to compensate for its anticompetitive behavior.
Most likely, Google won’t roll out any significant changes to its Google Play Store until a judge makes that final decision on exactly what to do. If you do this voluntarily before the decision is issued, it will only complicate matters further if the judge later rules that other action is necessary.
In other words, over the next few weeks or months as the condition enters its treatment phase, the Play Store will not change its rules. Developers will still need to pay their commissions, as before, and will often pass on the increased cost of doing business to consumers, as before, too. Google side deal rigged with Spotify The settlement with Match will also remain the same.
We don’t know yet whether U.S. District Judge James Donato, who heard the case, will force Google to cancel any of its deals, or whether the court will determine what kind of competitive agreements Google could enter into in the future regarding the app. Publishers or OEMs. We also don’t know how a judge will manage the details of alternative app stores or third-party payment systems — for example, by dictating what discounts Google must offer. Epic will likely seek more specific and detailed guidance from the court, while Google will push the court to understand that it still has a business to run and that excessive restrictions will ultimately hurt competition.
“The court will try to strike a balance to restore competition in these markets where the jury found competition to be restricted,” explained Paul Swanson, a partner at law firm Holland & Hart, where he advises clients on the antitrust implications. Their corporate relationships and represents them in antitrust lawsuits. However, he believes that the court will try to do this in the least intrusive way possible, since it will not want to make Google itself an anti-competitive entity. That means the court is unlikely to engage in “a lot of elaboration” of the remedy, he says, and will instead focus on expanding choice around downloading and purchasing Android apps.
Instead, what He is What’s immediately changing as a result of this ruling is the legitimacy surrounding the App Store business model itself — and perhaps others.
“What we know now is that this will impact the walled garden business model that Google, Apple and other companies have enjoyed for a while,” Swanson said.
It is believed that the decision may also affect other markets where the company has created its own platform and can therefore dictate the rules of the road, such as the app stores’ 30% commission. While Apple successfully argued in its antitrust case with Epic that it had a single product that integrated hardware with iOS and the App Store, the jury in the Google case reached a different conclusion. They found that app purchasing and distribution are two separate markets, which may prompt other major companies with models similar to Apple’s iOS operating systems, Google’s Android operating systems, the App Store and the Play Store to reconsider how they run their businesses.
“This is where they go, ‘Okay, there’s some real uncertainty in our basic model of how we do business,'” Swanson noted. In fact, the legal risks resulting from this business model may encourage other companies to change, even without being dragged to court.
Additionally, Swanson said class-action lawsuits may be filed that would allow other potential plaintiffs to argue their own cases, without having to have the deep pockets that Epic has. He added that there is a path laid out for others to follow.
However, said Rick Van Meter, CEO of… Alliance for App Fairness (CAF), A Epic was founded A lobbying group with other founding members and app developers on behalf of increased competition in the app economy, such as Spotify, Match, Tile, Deezer, Basecamp, and more. In all, the group that started with just over a dozen members now has more than 70 members. While they mostly focus on pushing forward legislation, such as the Open Application Markets Law VanMeter, which was introduced in the recent US Congress, believes this ruling is important because this case involved consumers – members of the jury – looking at the facts and deciding that Google’s conduct was anticompetitive.
“I think when consumers learn about these issues, when they have the opportunity to see what’s really going on behind the scenes… I think they understand it and want change,” VanMeter said.
However, he and the CAF remain skeptical about how Google will implement the judge’s decision when it comes to passing, pointing to other ways Apple and Google have been able to circumvent the spirit of the law or the court’s ruling. For example, Google opened a pilot program for alternative payments, but that’s still the case 4% discount Commissions often mean that the developer ends up paying more when they have to pay their own payment processing fees. When Apple was ordered to allow dating apps in the Netherlands to use alternative payment systems, it simply paid the fine for weeks on end for not implementing the change.
“I don’t think either company, including Google, can be trusted to comply with the intent of the ruling,” VanMeter told TechCrunch. “I think for our members, having more definition and clear rules of the road that would prevent them from circumventing the ruling would be what we would prefer.”
It is also believed that the ruling may prompt the Supreme Court to accept Epic’s other lawsuit against Apple.
“We hope the Supreme Court will look at it and want to review it and side with Epic,” VanMeter said. But he admits he’s not sure how the court would interpret a ruling in another case. “To the extent that it encourages them to look at the case and open it up and do a full review and make a decision, I think that would be great,” he said.
Swanson also agreed that the Google-Epic ruling may not directly impact Apple’s ongoing case with Epic, though it shows clear consumer interest, which led to the jury’s quick decision. But the way the two platforms achieved market power was not the same. Apple has not regularly engaged in side deals (although it has… It is considered one with Netflix) and did not pay developers to release the app in its App Store instead of theirs, as Apple only offers one route for app distribution: the App Store. It also does not have agreements with OEMs, as it manufactures its own devices. So, although there are similarities with Google, there are also stark differences.
Although Epic itself defended the ruling as “a victory for all app developers and consumers around the world,” in its statement, the truth is that the ruling is just one of many dominoes that would have to fall to truly dismantle the App Store business model. Equally important, or perhaps more so, is upcoming legislation in other markets, such as the Digital Marketplace Act in Europe, due to come into effect next year, and in the UK. Digital Markets, Competition and Consumers Billand regulations being considered in other markets including Brazil, Japan, Australia, CanadaAnd United State
For CAF, the hope is that the Google-Epic decision will at least prompt Apple to reconsider its business model.
“Just because it’s your business model doesn’t mean it’s legal or right,” VanMeter noted.