Epic Games filed another response to Google’s appeal of its guilty verdict in its antitrust trial over the way it operates 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 filed a lawsuit in 2020 alleging antitrust violations.
“This case is a long overdue reckoning. The court filing is replete with evidence of Google’s long-standing strategy to stifle competition between app stores and payment solutions in the Android ecosystem,” Epic Games said in its legal filing this weekend. “Google’s internal documents clearly describe the “combination of tactics” Google used because it believed that “competing on price… threatens to become a race to the bottom.”
Epic, which accused Google of destroying evidence in the case, added: “Despite Google’s deliberate destruction of evidence and attempts at concealment through what Google lawyers called “fake privilege,” the lawsuit has exposed the many ways in which Google systematically blocked any opportunity for rivals to compete. ”
Google has denied violations of antitrust laws and is appealing the legal damages in court. A year ago a jury ruled Google has violated antitrust laws when Epic Games was shut down in the process.
That outcome was different from the antitrust case against Apple, which Epic largely lost. In that case against Apple, Epic won on only one point: app and game developers should be able to advertise their alternative stores with lower prices in their apps in the Apple App Store.
But in this case, the jury found that Google had illegally linked its app store and its billing payment service. Much of the case hinged on evidence related to “Project Hug” deals, in which Google paid game developers not to compete with its app store, which the jury deemed anticompetitive.
Google, among other things, required all Original Equipment Manufacturers (OEMs, the companies that produce smartphones) that make Android smartphones to give preference to the app store (called Google Play) and paid most OEMs for complete exclusivity, Epic said.
Epic alleged that Google required all OEMs to impose technical and other barriers (often called “friction”) to prevent users from obtaining apps outside of Google Play. Google paid app developers to withhold exclusive content from Google Play rivals, and paid potential competitors not to launch rival app stores. And after crushing rival app stores, Google required developers who used Google Play to also use Google’s own payment solution (called Google Play Billing), for which Google imposed an exorbitant fee, Epic said. As a result, only 3% of Android devices in the United States have successfully installed a competing app store. Potential competitors – from small innovators to powerful companies like Amazon – have been left out, Epic claimed.
Based on ample evidence of Google’s misconduct, a jury unanimously found Google liable for unlawful restraint of trade, monopolization and tying after 15 days of trial, Epic said.
After the verdict, the court conducted a months-long remedial procedure, with extensive written submissions from the parties, including factual and expert witnesses. The court also held two evidentiary hearings, hearing from Google fact witnesses and six expert witnesses. The court then issued an order reflecting input from both parties, accepting or rejecting some of each party’s proposals. The injunction is intended to stop Google’s unlawful conduct and address its ongoing adverse effects, while allowing Google to compete on the basis of quality – and it will end in just three years, Epic said.
On appeal, Google says remarkably little about the conduct it engaged in. Instead, it laments the fact that in a different case with a different record involving different conduct by a different company (Apple), the outcome was partially different, Epic alleged.
Epic claimed that Google’s attacks on the district court’s order are also flawed. When a defendant violates antitrust laws, courts have broad discretion to devise remedies that will end the unlawful conduct and deprive the violator of the continuing consequences of his misconduct, Epic said. The court exercised this discretion carefully, taking into account the severity and pervasive impact of Google’s violations, leavened by sensitivity to the risks of intervention, Epic said.
Google’s claim that the court “did not take into account” possible security problems (Br.82) is also incorrect. The court expressly stated that “there are potential security and technical risks associated” with some of the remedies and allowed Google “to engage in normal security and safety processes.”
Epic said the trial evidence, however, showed that Google had misused security reasons as a pretext for imposing anticompetitive restrictions, and the jury necessarily concluded that the security reasons presented by Google did not outweigh the anticompetitive effects.
For example, Epic said the court reasonably placed limits on Google’s future claims of “security” as a basis for resisting remedies (requiring Google to show that restrictions on third-party app stores were “strictly necessary to ensure safety and security for users and developers to achieve’). In addition, the court had a record that found Google’s security concerns were overblown, Epic said.
Epic Games told the appeals court that the trial court’s ruling should be affirmed. Additionally, because Google has no prospect of success on the merits, the pending stay request should be dismissed immediately, allowing the injunction to benefit consumers and developers while the court prepares its full opinion, Epic said.
We’ll see what Google’s reactions are.
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