How Epic Games lost antitrust case against Apple, but won against Google | Explained

Now that the dust has settled around Epic Games’ antitrust lawsuit against Google, CEO Tim Sweeney explained the reasons why the firm lost its case against Apple but managed to win it against Google.

“Google, to achieve things with Android, they were going around and paying off game developers,” said Epic Games CEO Tim Sweeney, explaining the company's monumental win against the company. (AFP)

Epic Games came out victorious in the monumental legal battle against Google over the company's monopoly over the Android app marketplace and alleged the company used off-handed tactics to keep its control over the space thereby denying a fair chance for others to participate in the business on an equal footing. The San Francisco jury on Monday, December 11 unanimously delivered the decision in the Google antitrust case, deciding Google's tie between the Google Play app store and its Google Play Billing payment services was illegal, and Project Hug deals with game developers and OEMs, which dictated the distribution agreement were all noncompetitive. Now, Epic CEO Tim Sweeney has given an interview explaining the details of the lawsuit and the main reason why the company lost against Apple but managed to win against Google.

CEO Tim Sweeney speaks about the Google antitrust lawsuit

Sweeney gave an interview to The Verge and spoke about the lawsuit in depth. Explaining his own emotions at the end of the trial, he said that he was glad to see that despite a rapid jury verdict, it went in the way of the plaintiff which is not the norm. He also applauded the jury for carefully analyzing such a complex tech antitrust case.

He also explained how he was shocked to learn about the details of Google's Project Hug and the tech giant's deal with Spotify.

What is Project Hug?

Project Hug was the codename of a program through which Google silently paid off developers in the region of hundreds of millions of dollars to urge them to keep their games and apps on the Play Store instead of a rival platform. As per Epic's statements made during the lawsuit, the company said that once it announced its feature to bypass Google's fees (by offering a discount if the payment was made on the website), the company was worried that others may follow its lead and thus began the Project Hug to stop major titles in Android ecosystem.

Google's deal with Spotify

To break down the Spotify deal, this is how you can understand it in simple terms. Google charges the apps that carry out transactions on its platform by taking 30 percent of every transaction that occurs through Google's payment service. A similar amount is levied by Apple, Sony, Microsoft, and other marketplaces as well, with the only notable exception being the Samsung Galaxy Store which charges as less as 12 percent. The payment is slightly less or similar (depending on particular app deals) when the transaction occurs entirely on the app and through its own payment channels.

Now, as per Google's policy, it does not allow any apps to offer any lucrative deal to incentivize users to prefer on-app payment options instead of those provided by Google. Violation of this rule led to the delisting of Epic Games' Fortnite when it began offering more V-bucks at a cheaper rate when purchased directly from the game.

So, why exactly did Google offer that insane, and policy-breaking, deal to Spotify? Because Google needed Spotify more than it needed the Android marketplace.

Google's head of global partnerships Don Harrison said while testifying, “Listening to music is one of [the phone's] core purposes... if we don't have Spotify working properly across play services and core services, people will not buy Android phones”.

Why did Epic lose against Apple but win against Google?

Sweeney was also asked the reason he thought he lost a similar lawsuit against Apple but managed to win it against Google.

Calling Apple ice and Google fire, he told The Verge, “The thing with Apple is all of their antitrust trickery is internal to the company. They use their store, their payments, they force developers to all have the same terms, they force OEMs and carriers to all have the same terms”.

“Whereas Google, to achieve things with Android, they were going around and paying off game developers, dozens of game developers, to not compete. And they're paying off dozens of carriers and OEMs to not compete — and when all of these different companies do deals together, lots of people put things in writing, and it's right there for everybody to read and to see plainly,” he added.

Verdict against Apple

Judge Rodgers ruled in favor of Apple on nine of ten counts brought up against them in the case, including Epic's charges related to Apple's 30 percent revenue cut and Apple's prohibition against third-party marketplaces on the iOS. Rogers did rule against Apple on the final charge related to anti-steering provisions and issued a permanent injunction that, within 90 days from the ruling, blocked Apple from preventing developers from linking app users to other storefronts from within apps to complete purchases or from collecting information within an app, such as an email, to notify users of these storefronts.

Jury verdict against Google

The jury verdict in the Google antitrust lawsuit against Epic Games was in favor of Epic Games. The jury found that Google's app store broke anti-monopoly laws, with the unanimous verdict reaching the decision that Google has a monopoly in how apps are distributed on Android phones and that the company engaged in anticompetitive behavior. The court in January will begin work on what remedies to implement.