The Epic question: how Google lost its antitrust case while Apple won
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Apple rules the iPhone’s App Store with an iron fist — sideloading outside it is not allowed. Google lets anyone install any app on an Android phone. But guess which one of these two companies has an illegal monopoly, according to the courts?
As you probably already know, Google is the one that lost its fight against Epic Games this week. It’s a fight that Apple previously (mostly) won in a similar trial in 2021, beating claims that it had violated antitrust laws by charging mandatory in-app transaction fees and kicking Epic’s game Fortnite off the App Store. Google tried a similar move, but in its case, a jury found it had maintained an unlawful monopoly with the Play store; a judge is scheduled to consider remedies next month.
Listening to the verdict live in the courtroom, I couldn’t believe my ears at first. Readers in our comments and around the internet felt the same. How could Epic have possibly won against the company that gives away its open-source operating system for free, especially after losing to that company’s more locked-down competitor?
Here’s my set of theories — which I spent half an hour discussing on The Vergecast this week.
The court made it clear from day one: Epic v. Google is a different case from Epic v. Apple, with different evidence, in front of a different judge. Nothing in the Apple case is directly relevant to the Google case — in fact, the judge barred both sides from even bringing it up. Google’s lawyers never got to argue to the jury that Apple won. Besides, Apple hasn’t quite won yet: we’re waiting for the Supreme Court to decide whether it’ll hear a final appeal. (I won’t be covering the Apple case more than the brief outline I’m giving you here, since I’m ethically bound.) Google has also said it plans to appeal the decision in its case.
Precedent obviously plays a role in the legal system, with judges following the guidance of things like Supreme Court rulings. But as Nilay Patel points out on The Vergecast, we shouldn’t think of it as a deterministic algorithm — a new case is a fresh roll of the die.
Apple sells the iPhone. It’s Apple’s way or the highway, and has almost always been.
Google doesn’t sell the Samsung Galaxy phone lineup and didn’t sell the Motorola Droid. It builds the Google ecosystem within Android by sharing a cut of its advertising and app store profits if phone makers agree to prominently carry its apps (like Chrome, Gmail, and Play), use its APIs, and issue timely security patches. Epic’s lawyers could present details about these agreements and argue they showed Google using its power in one layer of the phone market to shut down competition in another.
As we learned in this trial, Google also tried to offer major app and game developers deals to keep them from bypassing the Google Play Store — like Project Hug, which gave top game developers up to hundreds of millions of dollars worth of credits, co-marketing, and support. Paradoxically, the fact that Google allowed some competition created a paper trail of discussions about how much of a potential threat that competition was, including forecasts of a “contagion effect” if game developers like Epic defected from Play.
Apple did face some awkward disclosures in its case too, like an internal email referring to iMessage as a “serious lock-in” factor for iOS. But the Epic v. Apple trial included long digressions about topics like app store moderation, giving lots of airtime to Apple’s non-monopolistic rationales for a walled garden. While Epic argued that these rationales were merely a pretext for running a monopoly, the ruling ended up treating them as valid concerns, albeit with some skepticism. In an antitrust trial, intentions matter — and over the course of its many negotiations, Google wrote a lot of intentions down.
Epic Games CEO Tim Sweeney told me it’s unfortunate that the more open company is getting penalized for that openness:
I think Apple is… it’s a little bit unfortunate that in a lot of ways Apple’s restrictions on competition are absolute. Thou shalt not have a competing store on iOS and thou shalt not use a competing payment method. And I think Apple should be receiving at least as harsh antitrust scrutiny as Google.
Putting aside Project Hug for a sec, Spotify pays Google nothing to get almost all the benefits of the Google Play store, we learned in court. I repeat: Spotify pays 0 percent when it uses its own in-app payment system — while a competing subscription service might pay 11 percent of its revenue if it’s even allowed to use its own payments system at all. “If you’re a smaller developer than Spotify, you get screwed,” Sweeney told me after the verdict.
