Jury delivers blow to Google in trial on Android app store’s payment system
SAN FRANCISCO — A federal court jury has decided that Google’s Android app store has been protected by anticompetitive barriers that have damaged smartphone consumers and software developers, dealing a blow to a major pillar of a technology empire.
The unanimous verdict reached Monday came after just three hours of deliberation following a fourweek trial revolving around a lucrative payment system within Google’s Play store. The store is the main place where hundreds of millions of people around the world download and install apps that work on smartphones powered by Google’s Android software.
Before the nine-person jury in San Francisco started to weigh the evidence laid out during the four-week trial, lawyers on opposing sides of the legal battle spent about two hours making their closing arguments in the filed by Epic Games, the maker of the popular Fortnite video game.
Epic lawyer Gary Bornstein depicted Google as a ruthless bully that deploys a “bribe and block” strategy to discourage competition against its Play Store for Android apps. Google lawyer Jonathan Kravis attacked Epic as a self-interested game maker trying to use the courts to save itself money while undermining an ecosystem that has spawned billions of Android smartphones to compete against Apple and its iphone.
Much of the two lawyers’ dueling arguments touched upon the testimony from a litany of witnesses who came to court during the trial.
The key witnesses included Google CEO Sundar Pichai, who sometimes seemed like a professor explaining complex topics while standing behind a lectern because of a health issue, and Epic CEO Tim Sweeney, who painted himself as a video game lover on a mission to take down a greedy tech titan.
Pichai and Sweeney met for about an hour late last week in an unsuccessful attempt to reach a settlement before the case went into jury deliberations, according to court documents.
Epic alleged that Google has been exploiting its wealth and control of the Android software that powers most of the world’s smartphones to protect a lucrative payment system within its Play Store for distributing Android apps.
Just as Apple does for its iphone app store, Google collects a 15-30% commission from digital transactions completed within apps — a setup that generates billions of dollars annually in profit.
That commission system “has led to higher prices for developers and consumers, as well as less innovation and quality,” Bornstein said during his closing argument.
Google has staunchly defended the commissions as a way to help recoup the more than $40 billion vestments that it has poured into building into the Android software that it has been giving away since 2007 to manufacturers to compete against the iphone.
“Android phones cannot compete against the iphone without a great app store on them,” Kravis asserted in his closing argument.
While Epic has been contending the Play Store is a de facto monopoly that drives up prices and discourages app makers from creating new products, Google drew a picture of a broad and fiercely competitive market that includes Apple’s iphone app store in addition to the Android alternatives to its Play Store.