Thursday, May 23, 2024 | 5:07 p.m.
SAN FRANCISCO — Google is tried to confront the latest in a succession of legal attacks on its digital empire on Thursday as federal judge began to address anticompetitive practices in the app market for smartphones powered by its Android software.
The San Francisco court hearing before U.S. District Judge James Donato comes five months after a nine-person jury decided Google had turned its Play Store for Android phone apps into an illegal monopoly following a four-week trial in an antitrust case brought by Epic Games, the maker of Fortnite.
At the start of the hearing, Donato told lawyers for both parties not to revisit the jury's verdict, which is now “carved in stone.” He also said that the case is about “competing generally,” and he is “not looking for a relief that gives a helping hand just to Epic.”
The verdict has given Epic a chance to persuade Donato to impose sweeping restrictions and other changes on how Google manages the distribution of Android apps. Those apps enable a wide range of services on virtually every phone that isn't made by Apple.
At Thursday's hearing, Donato heard from experts on both sides arguing over Epic's sweeping proposed changes to Google's app store. Under Epic’s key proposals, Google would be required to make all Android apps in the Play Store available to competing stores — and also distribute rival app stores directly to consumers who want to download them. Basically, it would have to put competing app stores in its own app store to boost rivals' chances of getting discovered by consumers.
This, Epic argues, would help level the playing field for new and smaller competitors since Google‘s app is boosted by a network effect — it has the dominant app and the most users.
These remedies would eventually expire, although it is not clear when. Epic proposed six years, but it was unclear if Donato would allow that. Six years, he said, “strikes me as an awfully long time.”
Google — which as Donato pointed out filed 90 pages of objections to Epic's proposals earlier this month — argued that its network effect advantages existed long before it gained monopoly power.
Epic also wants Donato to forbid Google from requiring the Play Store to be automatically installed on Android phones and appoint an oversight committee to ensure the new order is followed.
In court documents leading up to Thursday’s hearing, Google argued Epic’s proposals would have a chilling effect on the Play Store that would do more harm than good for the consumers and developers of Android apps.
At the hearing, Donato appeared skeptical of this argument, saying that while Google seems to be assuming “without any evidence” a dark, dystopian future if Epic gets its way, “there is an equally reasonable probability that it will be the best thing that has ever happened, so it is a value-neutral choice.”
To Google's arguments that rival, unscrupulous app stores could compromise consumer privacy, Donato said the tech giant doesn't have data to support it — and asked if it's “in any way different than what Google already does?”
While Google is predicting a “terrifying world of chaos and anarchy” if Epic's proposals are implemented, Donato said, “I just don't buy it.”
This, he said, is the consequence of breaking antitrust laws.
“You are going to repair the damage, and that means you (might) have a less-than-ideal situation from a competitive perspective for a remedial period,” he said.
As Apple does on its store for iPhone apps, Google makes billions of dollars annually from its Play Store for Android apps through a commission system that charges a fee of 15% to 30% on a variety of digital transactions. Epic and other makers of popular apps, such as Spotify and Match Group, have been attacking those in-app commissions as an abusive tactic that gouges consumers as well as them.
Epic is pushing Donato to require Google to ban many of the practices that enabled the Play Store to stifle alternatives to the Play Store that would have charged far lower commissions that could help bring down prices and foster more competition that could spawn more innovation.
Donato did not make a ruling Thursday but said closing arguments for the case would likely be held in August. He gave Google 30 days
Google is trying to minimize the upheaval to its lucrative Android ecosystem just weeks after its lawyers delivered the closing arguments i n an even more consequential antitrust case targeting its dominant search engine. A ruling in that case filed by the U.S. Justice Department isn't expected until later this summer or autumn.
In the Play store case, Google contends a series of concessions that it's making as part of a $700 million settlement it made in another antitrust case brought by attorneys general across the U.S. already have ensured there will be more competition.
The settlement, reached before the Epic case went to trial, will pay at least $2 to each of the more than 100 million consumers covered by it while requiring Google to lower the barriers that have made it difficult for rival options to the Play Store.
Epic, which has derided the attorneys general settlement as ineffectual, is seeking more stringent measures that would handcuff Google and make it easier for rival app stores to connect with consumers with Android phones.
