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Monday, November 6

Google Back in Court to Face Epic Games Suit

Alphabet is entering their second antitrust trial in two months. 

With the DoJ already breathing down their neck, Alphabet now has to fight a legal battle on two fronts as a suit filed by Epic Games will begin trial today. 

Basically, Epic Games is suing Alphabet for taking an unfair cut of revenue from third-party developers who sell their apps in the Google Play store. If this sounds familiar, Epic basically filed the exact same lawsuit against Apple over the App Store in iOS. Epic already has their own game store and would prefer to sell their products independently of these app stores, but has not been successful. Epic tried to force an update on Fortnite back in August 2020 that would allow them to bill for in-app purchases directly instead of through the Google Play store. Google basically blocked that update, which is the core issue Epic is suing over. 

This lawsuit doesn't have a solid chance of going anywhere, as the Android OS and Google Play store have more lenience and freedoms than iOS, and Epic's lawsuit against Apple was thrown out and their appeals were denied. Google also settled a similar lawsuit with Match Group on Tuesday, allowing them to start using a new system called 'user choice billing' by March of next year. This new system is a little more favorable to app developers, but it's not enough to assuage Epic here. 

Even though this lawsuit has less of a chance of winning, it still entering the trial phase at exactly the worst time for Alphabet. With both the DoJ and Epic suits, Alphabet is going to have a more difficult time demonstrating that they don't exert monopoly influence over the market. Is Alphabet going to be the first big tech player to fall to Antitrust efforts? The market doesn't seem to think so with GOOG stock trading flat at market open. 

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