On 20th August 2021, Epic Games finally revealed details about its antitrust lawsuit against Google. The newly released court filings contained the nature of the allegations and the evidence to back them up. Epic filed a case not only against Google but Apple too for the same reasons.
The case against Apple finished its trails stages and are waiting to get a verdict from the federal judge, while the case against Google is going at a slow pace. Both Google and Apple had removed Fortnite from their app stores, which is what led to Epic filing a lawsuit against them. Fortnite currently has over 400 million registered players only from those two app stores.
According to the lawsuit, Epic claims that both Apple and Google are misusing their monopoly power to control or generate more profits. The main problem that Epic has with Google and Apple is over the excessive fees that the app stores of these companies are charging its app developers. So far, Epic has made multiple allegations against both Google and Apple, keep reading to find out what they are.
Why did Epic file a lawsuit against Google?
In July 2018, Epic Games received a partnership deal of over $208 million from Google executives for a period of three years, the gaming company also claimed that Google tried to offer a discounted fee of 25%, instead of its standard 30% cut it usually took from app developers, to give Epic Games an additional revenue share.
But the gaming company is said to have rejected this “custom offer” and choose to allow Fortnite downloads for android through Epic's own website through a partnership with Samsung electronics. Another reason Epic Games trying to bypass Google Play Store and Apple app store is that they wanted to help their users in availing better deals and offers for in-game purchases in Fortnite on Epic's own store.
After this happened, both Google and Apple removed Epic’s Fortnite gaming app from their app stores which led to Epic filing a lawsuit against Google. Both Google and Apple app stores are known to charge 30% fees for all the in-app purchases for games, which is their main source of revenue, especially for gaming app developers. Epic wants to charges their user’s only a 12% fee, but both the conglomerates have blocked the gaming company from getting its store on their platform.
Epic also added that the 30% fee is over 10 times more than what payment platforms like PayPal and Stripe offer, which is only 2.9%. The Gaming Company is said to be expecting relief from Google and Apple monopolistic practices and is not looking to gain any monetary relief through this lawsuit.
Epic's Allegations against Google
According to Epic Games, Google has made many attempts to make big smartphone companies like Samsung and One plus not preinstall the Epic Games store. The lawsuit says that Google apparently created Project Hug in order to give benefits or deals to gaming companies like Activision Blizzard that support Google Cloud and YouTube.
It also added that Google is offering side deals like YouTube sponsorships and cloud services to companies like Activision Blizzard through Project Hug. The company also claims that Google made attempts to buy shares of Epic Games through a major shareholder Tencent so they can shut down competition from the gaming company. Epic also stated that Google has added many unnecessary extra steps to prevent users from purchasing directly out of Epic.
The allegation does not end there as Epic also claims that Android is not open-source as it claims and has made deals with Google that prevent smartphone manufacturing companies from offering other app stores without restrictions. Moreover, the company also went on to say that both Google and Apple are working together even though they are competitors.
Epic’s lawyers added that “These deals allow Google to keep its monopolistic behaviour publicly unchallenged. But Epic is not interested in any side deals that might benefit Epic alone while leaving Google’s anti-competitive restraints intact; instead, Epic is focused on opening up the Android ecosystem for the benefit of all developers and consumers.”
Other Allegations against Google
Over 37 states and districts of the USA had filed a separate antitrust lawsuit against Google Play Store claiming that Google Play Store exercises a monopoly over application distribution. The attorney generals from these states claimed that the platform was cutting down the profits of app developers and taking a huge commission on the in-app sales.
This lawsuit also added that Google was using illicit measures in order to maintain its monopoly over app developers. Because of this, Google Play Store for the first time in 13 years disclosed its revenue on 30th August 2021.
According to the Google Play store, the total revenue of the platform was over $11.2 billion in 2019. This amount is said to include the price of the app, in-app purchases and the revenue generated through advertisements on the Play Store app.
What is Google's Response against these Allegations?
Google has already come out and called these allegations baseless and said that it is mischaracterized their business conversations. Google spokespersons also added that Android does provide more choices in smartphones for both app developers and its consumers. Google has not come out with their official statement yet, while Epic’s year-old lawsuit against the company is likely to be a threat to its app store.
Frequently Asked Questions
What is the main reason behind the Epic lawsuit against Apple and Google?
The main reason Epic has filed a lawsuit with Google and Apple is over the excessive fees that the app stores of these companies are charging its app developers.
What is Epic Games?
Epic Games, Inc. is an American video game and software developer and publisher with its headquarters based in Cary, North Carolina.
Who is the founder of Epic Games?
Tim Sweeney and Mark Rein founded Epic Games on 15 January 1991.