Google’s loss in the antitrust battle against Epic Games is a significant upset to the business model of the mobile app ecosystem. The jury in San Francisco quickly returned a verdict in favor of Epic Games, stating that Google “willfully acquired or maintained monopoly power by engaging in anticompetitive conduct.” However, the judge is yet to decide on the remedy or penalty for Google.
Until the judge makes a final decision on the penalty, it’s unlikely that Google will implement any significant changes to its Google Play Store. Rolling out changes voluntarily could complicate matters if the judge later mandates additional actions. During this remedial phase, which may take weeks or months, the existing rules of the Play Store will likely remain in place. Developers will still be required to pay commissions, potentially passing the increased costs to consumers. Agreements like Google’s deal with Spotify and settlement with Match will also stay intact until the judge issues a final decision.
We don’t know yet if U.S. District Judge James Donato, who tried the case, will force Google to unwind any of its deals, or if the court will specify what sort of competitive agreements Google can enter into in the future with regard to app publishers or OEMs. Nor do we know how the judge will manage the specifics around alternative app stores or third-party payment systems — for example, by dictating the discounts Google should offer. Epic will likely argue for more specific and detailed guidance from the court, while Google will push the court to understand that it still has a business to run and that too much restriction would ultimately harm competition. the business model
“The court is going to be trying to strike a balance to restore competition in these markets where the jury has found competition has been restrained,” explained Paul Swanson, a partner at law firm Holland & Hart, where he advises clients on antitrust implications of their corporate relationships and represents them in antitrust litigation. Still, he believes the court will try to do so in the least intrusive way possible, given that it won’t want to make Google itself a non-competitive entity. That means the court is not likely to engage in “too much tailoring” of the remedy, he says, and will instead focus on expanding choice around the downloading and purchase of Android apps.