‘Google believes in impunity’, says author of monopoly action – 12/16/2023 – Tech

Epic Games chief executive Tim Sweeney is concerned that Google will “get away with it” and maintain high fees on its app store, despite the Fortnite maker’s legal victory over the tech giant this week.

Sweeney told the Financial Times that he was concerned that Google would offer “false solutions” to the California court that on Monday found that the search company was abusing a monopoly over the Android app ecosystem.

In the landmark case in the US, Epic accused Google of making deals with smartphone manufacturers, network operators and game developers to close alternatives to its Play Store on Android devices.

Epic said the agreements allowed the company to charge an excessive 30% fee on digital purchases through a mandatory payment method, which the game maker said would not be as high if Google were exposed to more competition. . The court will next decide how the search giant should change its business to comply with the jury’s verdict.

“My biggest concern in all of this is that Google really believes it will get away with continuing its scheme,” Sweeney said.

He said he was concerned that Google might allow alternative payment methods but charge developers a fee close to 30% of their revenue to use the Play Store. This measure would, in effect, remove the incentive to abandon Google’s billing.

The judge in the case has already ruled out trying to “micromanage” Google’s commission rates. A settlement with US state attorneys general will soon be made public and will show the concessions Google has already agreed to make regarding its store.

“My concern with the state settlement, which I am not aware of, is that it will restore a false form of competition that does not actually offer consumers the benefits of real competition,” Sweeney said.

Given the operating costs that Epic sees for its own store, “we know that these stores can operate at much lower rates than what Google is charging,” he said.

Epic is still hoping for a better outcome from the case, which was the first time in more than two decades that a major US technology company has been found guilty of monopolistic behavior by a US court. The decision was a major rebuke to Google at a time when the search giant faces two separate antitrust cases brought by the US Department of Justice.

Sweeney, a video game programmer, founded Epic in 1991. The company, which develops the popular game Fortnite, is now valued at more than US$30 billion (about R$148 million). China’s Tencent has an approximately 40% stake in the company.

Epic launched a double legal offensive against Apple and Google in August 2020, challenging the way the two technology giants manage their respective app stores.

Fortnite was later removed from Apple’s App Store and Google’s Play Store and remains banned. But a judge who heard Apple’s case largely ruled against Epic. A petition urging the U.S. Supreme Court to consider an appeal of that decision is pending.

Google’s fate, which was decided by a jury rather than a judge, was very different. After the verdict Monday, Sweeney, freed from court rules that prevent anyone from speaking to jurors during the course of a trial, went to thank them.

“Everyone is a smartphone user now, and one of the judges is a Fortnite player, and that was good to see,” Sweeney said. “It was really comforting to see that the justice system worked so well in the end.”

Sweeney said he believes Google’s defeat is largely due to the weight of the evidence against the company regarding the billions of dollars it has paid companies like Samsung over the years to maintain its suite of apps and its Play Store in its devices.

The judge in the case, US District Judge James Donato, also criticized the company for its failure to preserve evidence, with internal policies to delete conversations. He instructed the jury to conclude that Google’s conversation deletion policies were designed to hide incriminating evidence.

“Google employees clearly knew what they were doing,” Sweeney said. “They expressed a lot of lucidity while writing emails to each other, although they destroyed most of the conversations.”

“There was still massive destruction of documents,” Sweeney added. “It is astonishing that a trillion-dollar corporation at the pinnacle of the American technology industry would engage in such blatant dishonest processes as putting all of its communications into a form of chat that is destroyed every 24 hours.” Google has since changed its conversation deletion policy.

Epic says it’s fighting for all Android developers, but it also has a clear interest: increasing traffic to its own Epic Games Store, which charges a 12% fee for developers who sell on the platform, and seeing a lower percentage withdrawal of your Fortnite revenues. Sales of Epic in-game digital items and upgrades are also subject to Apple and Google commission rates.

While Google operates a technically “open” app ecosystem, licensing Android to smartphone makers who can theoretically offer competing stores, Apple has an end-to-end “closed” model where it offers iOS exclusively on Apple devices.

For Sweeney, while the execution may differ between Apple and Google, the result is the same. “You have monopolies in distribution being imposed outright by Apple and only on dishonest and sneaky terms by Google. And these practices have not yet been successfully stopped.”

Google said it competes “fiercely” with Apple, as well as other gaming-specific platforms. On Android, you can also download applications from other sources. Apple also disputes the notion that it operates a monopoly around iOS.

The next steps in Google’s case are complex. The tech giant could appeal the jury’s verdict sometime next year. A separate hearing will allow the judge to consider what Google needs to do to change its policies and its contracts with smartphone makers, network operators and game developers.

“I hope this is a robust process because Google has eliminated competition in so many different ways and has cemented its monopoly so deeply into the Android ecosystem,” Sweeney said. “It will take a set of multifaceted solutions to restore competition in these markets.”