Epic Games has filed another answer to Google’s appeal of a guilty verdict in its antitrust trial over how it runs its Google Play Store.
Epic Games, which has been in a lawsuit with Google since the latter (and Apple) removed Epic’s Fortnite Battle Royale game from the Google Play Store after Epic Games sued for antitrust violations in 2020.
“This case is a long-overdue reckoning. The beta record is replete with evidence of Google’s years-long strategy to suppress competition between app stores and payment solutions in the Android ecosystem,” Epic Games said in its legal filing over the weekend. “Internal Google documents detail The “combination of tactics” used by Google because it believes that “competition on price… tends to be a race to the bottom.”
Epic, which accused Google of destroying evidence in the case, added: “Despite Google’s intentional destruction of evidence and its attempt to conceal it through what Google’s lawyers called ‘false privilege,’ the trial revealed the multiple ways in which Google systematically obstructed every avenue for competitors to compete.”
Google denied antitrust violations and appealed its legal loss in court. A year ago, the jury found Google violated Antitrust laws when it shut down Epic Games during litigation.
This outcome was different from the antitrust case against Apple, which Epic largely lost. In that case against Apple, Epic won on only one point — that app and game developers should be allowed to advertise their alternative stores at lower prices within their apps on Apple’s App Store.
But in this case, the jury found that Google illegally linked its app store and bill payment service together. Much of the case hinged on evidence regarding “Project Hug” deals, where Google paid game developers so they wouldn’t compete with its App Store, which the jury deemed anticompetitive.
Among other things, Google asked all original equipment manufacturers (OEMs, companies that make smartphones) that make Android smartphones to favor its own app store (called Google Play) and paid most OEMs for complete exclusivity, it said. Epic said.
Epic claimed that Google required all OEMs to impose technical and other hurdles (often called “friction”) to discourage users from obtaining apps outside of Google Play. Google paid app developers to withhold exclusive content from Google Play competitors, and paid potential competitors not to launch rival app stores. Epic said that after crushing competing app stores, Google required developers who used Google Play to also use Google’s own payment solution (called Google Play Billing) for which Google charged exorbitant fees. As a result, only 3% of Android devices in the US successfully install a competing app store. Epic claimed that potential competitors — from small innovators to powerful companies like Amazon — had been shut out.
Epic said that on the basis of ample evidence of wrongdoing by Google, and after 15 days of trial, the jury unanimously found Google liable for unlawful restraint of commerce, monopoly, and linkage.
Following the ruling, the district court conducted remedial proceedings lasting months, with extensive written submissions from the parties, including fact witnesses and experts. The court also held two evidentiary hearings, hearing from Google’s fact witnesses and six expert witnesses. The court then issued an injunction reflecting the input of both sides, accepting and rejecting some of each side’s proposals. Epic said the injunction is designed to stop Google’s illegal behavior and address its ongoing negative impacts, while allowing Google to compete on the merits — and expires in just three years.
On appeal, Google said remarkably little about the conduct it engaged in. Instead, it bemoans the fact that in a different case with a different record regarding different conduct by a different company (Apple), the outcome was partly different, Epic claimed.
Epic claims Google’s attacks on the district court’s injunction are also flawed. When a defendant violates antitrust laws, courts have broad discretion to craft remedies that will end the illegal conduct and deprive the perpetrator of the continuing fruits of his or her misconduct, Epic said. Epic said the district court here exercised that discretion thoughtfully, taking into account the seriousness and pervasive impact of Google’s crimes, which were heightened by sensitivity to the risks of interference.
Google’s claim that the district court “failed to account” for potential security concerns (Br.82) is also incorrect. The court explicitly stated that “there are potential security and technical risks” in some of the remedies and authorized Google to “engage in normal security and safety operations.”
Epic said the trial evidence showed, however, that Google misused security justifications as a pretext for imposing anticompetitive restrictions, and the jury necessarily found that Google’s security justifications were outweighed by its anticompetitive effects.
Thus, Epic said the district court placed reasonable limits on Google’s future invocations of “security” as a basis for resisting remedies (requiring Google to show that the restrictions on third-party app stores “were strictly necessary to achieve the safety and security of users and developers”). Furthermore, Epic said the district court had a record proving that Google’s concerns about security were overblown.
Epic Games told the appeals court that the district court’s ruling should be affirmed. Additionally, because Google has no prospect of success on the merits, the pending stay motion should be dismissed immediately, allowing the injunction to begin benefiting consumers and developers while the court prepares its full opinion, Epic said.
We’ll see what Google comments in response.
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