This week has found Apple in the middle of some contentious disputes as reported here and here. However, the heat continues for Apple as Epic Games filed an antitrust law suit against Google and Apple for removal of the popular gaming application ‘Fortnite’ as Epic includes a direct payment method instead of paying through ‘app stores’ by Google and Apple. Apple is already in the middle of a similar antitrust dispute with Spotify over its mandatory purchase system built in the app store itself and charging 30% commission on the payment transactions.
Epic Games has also filed for an injunctive relief before the United States District Court, Northern California against Google LLC for abusing its monopoly power in the merchant market for mobile operating systems and the Android mobile app distribution market. Epic, in this suit for injunction, states “Epic likewise does not seek a side deal or favorable treatment from Google for itself. Instead, Epic seeks injunctive relief that would deliver Google’s broken promise: an open, competitive Android ecosystem for all users and industry participants. Such injunctive relief is sorely needed“.
Epic contends that, by having a monopoly in the Android mobile app distribution market, Google via its ‘Google Play Store’ installs itself as an “unavoidable middleman for app developers who wish to reach Android users and vice versa” and “uses this monopoly power to impose a tax that siphons monopoly profits for itself every time an app developer transacts with a consumer for the sale of an app or in-app digital content. And Google further siphons off all user data exchanged in such transactions, to benefit its own app designs and advertising business“.
Epic contends that by removing its gaming app ‘Fortnite’ (which had millions of users) because of a direct payment method, Apple and Google are abusing their position as this “unavoidable middleman” and exploiting app developers to mandatorily adhere to their arbitrary guidelines. This practice, also known as ‘bundling’, amounts to anti-competitive conduct as Epic contends. For a detailed legal analysis of bundling practice by app stores, read our earlier post here. With regard to bundling, the suit states: “Google bundles the Google Play Store with a set of other Google services that Android OEMs must have on their devices (such as Gmail, Google Search, Google Maps, and YouTube) and conditions the licensing of those services on an OEM’s agreement to pre-install the Google Play Store and to prominently display it. Google then interferes with OEMs’ ability to make third-party app stores or apps available on the devices they make. These restrictions effectively foreclose competing app stores—and even single apps—from what could be a primary distribution channel“.
The suit filed by Epic prays for an injunction prohibiting Google’s anti-competitive and unfair conduct and mandating that Google take all necessary steps to cease such conduct and to restore competition; and to declare that such contractual restraints by Apple and Google are unlawful and anti-competitive.
Reported by Tanya Varshney, Chief Editor