Google is facing one of the most important court cases in company history, and so far it has suffered a defeat.
Game developer Epic scored the first victory in its case against Google, after a jury found that forcing developers to sell software via Google Play app store and Play payment system amounts to an illegal monopoly. These services are a crucial source of revenue for Google, with Play app revenues topping $42 billion in 2022.
Epic claims they could make hundreds of millions, if not billions more by selling software outside of the Play Store. Epic CEO Tim Sweeney argued in a statement that "Google's app store practices are illegal and they abuse their monopoly to extract exorbitant fees, stifle competition and reduce innovation."
It's estimated that over 3.6 billion people use smartphones equipped with Android, the mobile operating system built and managed by Google. While many software developers, including Microsoft, charge people fees to use their software, Google has given Android away for free to smartphone makers, such as Samsung.
One of the biggest reasons is that Google wants as many people as possible to buy software from the Google Play app store. Whenever such software is sold, Google rakes in up to a whopping 30 percent of the revenue. Google currently requires software to be sold through its channels. With billions of people making billions of purchases, the revenue quickly adds up.
Epic argues that they shouldn't have to pay a middleman when selling software. Epic is not suing for monetary damages, but instead, the right to sell software via their own app stores and without being forced to use Google's payment system, which would cut Google out of valuable revenues. Google plans to appeal the ruling.
