On November 18, 2019, the Google logo adorned a carpet at the entrance of Google France in Paris. However, on March 20, 2023, Google announced its decision to lay off 12,000 employees, following the footsteps of other tech companies in downsizing their workforce due to the COVID-19 pandemic. (AP Photo/Michelle Euler, File)Thank you for reading this post, don't forget to subscribe!
by Michael Liedtke
The upcoming trial in San Francisco federal court will determine the legality of Google’s digital payment processing system in the Play Store. This system is responsible for distributing apps for Android phones and there are claims that it is causing price hikes, impacting both consumers and developers. A 10-member jury will be responsible for making the final decision.
The trial, presided by U.S. District Judge James Donato, is set to commence shortly before the Christmas season. Testimony will be given by Sundar Pichai, a former Google executive who currently holds the position of CEO at Alphabet Inc., Google’s parent company.
Pichai recently testified in an antitrust trial in Washington, D.C. where Google faced off against the U.S. Justice Department’s attempts to limit its dominance in internet search. The case argues that Google hampers competition and abuses its power to suppress innovation. Epic Games, the creator of the popular Fortnite video game, is pursuing a similar lawsuit against Google’s Play Store, following its loss in a 2021 trial against Apple’s iPhone App Store. Although Apple emerged victorious in most aspects of the lawsuit, there was a potential opening in Apple’s stronghold on the iPhone. The judge and appeals court ruled that Apple should allow apps to offer alternative payment options, which could reduce the hefty commissions charged by both Apple and Google (ranging from 15% to 30%) on digital purchases made within mobile apps. Apple is appealing this aspect of the ruling to the U.S. Supreme Court, while Epic is also challenging various elements of its lost case.
Epic has turned its attention towards Google’s commission system, despite the fact that Android software already permits other stores, like Samsung, to install apps on its phones for use on the operating system. Nevertheless, Epic claims that Google maintains a firm grip on the Android app ecosystem and its payment system, going as far as spending hundreds of millions of dollars to stifle competition.
Following in the footsteps of Apple during its trial, Google asserts its commission as a means to recover the invested capital in its Play Store, emphasizing that maintaining control safeguards the security of countless Americans who download applications on Android-powered devices.
In the beginning, Google faced numerous adversaries in the legal battle. However, in September, it reached a settlement regarding the charges filed against the Play Store by state attorneys general. Just recently, it also resolved a lawsuit initiated by Match Group, the owner of Tinder and other online dating services. Consequently, the matter has been resolved.
Google’s decision to switch from requesting a jury trial to proceedings to be decided by a judge was prompted by the Match settlement. However, Donato rejected this bid.
During Google’s trial with Epic, the details of the settlement between Match and state attorneys general, which includes Match receiving $40 million and access to Google’s “user choice billing” system, are anticipated to be revealed.
Epic CEO Tim Sweeney strongly criticized the “user choice billing” option in a post on social media, pledging to take legal action against Google. Sweeney is anticipated to provide testimony during the trial as well. Google’s Vice President of Government Affairs and Public Policy, Wilson White, accused Epic of attempting to gain benefits without any effort in a blog post. White, after highlighting Epic’s previous loss in its case against Apple, placed the blame on the game maker for attempting a less credible case against Android.