Google (NASDAQ: GOOGL) has called on a California appellate court to overturn the ruling in its case against Fortnite maker Epic Games, where it was found guilty of anticompetitive practices.
In a long-running court battle that started in 2020, Epic Games accused Google and Apple (NASDAQ: AAPL) separately of blocking rival app stores from their Android and iOS ecosystems, respectively. In December 2023, a jury in San Francisco sided with the gaming firm, and then two months ago, U.S. District Judge James Donato ordered Google to allow other app stores and payment systems to serve Android users.
The ruling was flawed, argues Google in a new filing at the Ninth Circuit Court of Appeals in San Francisco. First, Google believes that Judge Donato should not have left the matter in the hands of a jury. It noted that in a similar case against Apple, the judge ruled, and the iPhone maker came out relatively unscathed.
Additionally, the jury incorrectly claimed that Google violated federal antitrust laws, which it couldn’t have since it directly competes with Apple in the smartphone market. In the Apple case, the presiding judge acknowledged that the Cupertino-based firm had a formidable rival in Google, which informed his final decision. Google says that the ruling, unless overturned, “will directly undercut [its] efforts” to compete with Apple.
“This case involves an extraordinary attempt by a lone competitor to use the federal judiciary to restructure the day-to-day operations of Google’s app store, Google Play, and to unilaterally reshape markets with consequences for millions of non-parties,” it said in its 110-page filing.
At the crux of Epic’s legal battle against the two tech giants is their restriction on payment methods. Both Google and Apple require app makers to integrate their native payment systems, which take a cut of 15% to 30% of total sales. This is a significant number: one study found that in 2023, consumers spent $123 billion on in-app purchases.
The battle started when Epic Games attempted to install its payment system in its mobile apps to skirt the 30% platform tax. This violated the terms of service of both app stores, and consequently, the two tech giants kicked out its popular Fortnite game from their platforms.
Fortnite is still one of the most popular video games globally, and before it was kicked out, it had generated $1.1 billion in cumulative mobile revenue. Despite the ouster, Fortnite has remained wildly popular, and last year, it drew in 126 million players, its highest number ever.
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