Microsoft’s Legal Maneuvering in the Google-Epic Games Antitrust Case
In a significant development within the ongoing antitrust litigation involving Epic Games and Google, Microsoft has stepped into the fray, urging a federal court to maintain an injunction that compels Google to dismantle its alleged monopoly in the Android apps market. This injunction is particularly focused on payment practices, and it emerges from a lengthy legal battle initiated by Epic Games, the creator of the popular game Fortnite.
On January 16, Microsoft submitted a friend-of-the-court brief ahead of a pivotal hearing scheduled for Thursday in U.S. District Court in San Francisco. During this session, executives from both Google and Epic are expected to request modifications to a permanent injunction issued by U.S. District Judge James Donato in October 2024. This injunction was a response to Epic’s lawsuit against Google filed in 2020, mandating that Google allow app developers access to its Android ecosystem and permit the use of external payment systems.
Microsoft’s brief cautioned the court to remain vigilant against potential modifications that could inadvertently bolster Google’s profit margins while simultaneously benefiting Epic. The company emphasized that any arrangement favored by Epic might not align with the broader public interest, a sentiment echoed by attorneys from the Federal Trade Commission who also weighed in on the matter.
Settlement Developments and Implications
In November, Google and Epic announced a comprehensive settlement aimed at resolving a five-year dispute over access to Google’s Play Store and the integration of third-party billing tools within its operating system. This settlement reportedly includes a new business partnership centered on Epic’s Unreal Engine technology, valued at 0 million over six years, as reported by The Verge.
During the recent court proceedings, Judge Donato indicated that the business arrangement between Google and Epic hinges on the court’s approval of the settlement, with most details remaining confidential. Prior to Epic’s lawsuit, Google had enforced a 30% revenue-sharing requirement on sales made through its app store, a policy that Epic contested in parallel with a similar action against Apple.
The revised injunction proposed by Google and Epic suggests that Google could impose fees ranging from 9% to 20%, with the higher rate applicable to gaming purchases. Furthermore, the settlement would enable Google to require its Play Store billing method to be offered alongside an alternative payment option, a move that Microsoft argues undermines the original purpose of the injunction.
Microsoft contends that if developers are compelled to utilize Google Play Billing to access the Play Store, their incentive to adopt alternative payment methods diminishes significantly. The company articulated concerns that Google’s new fee structure could render alternative billing options economically unfeasible for developers.
This proposed agreement, which is contingent upon Judge Donato altering the injunction, follows the U.S. Supreme Court’s decision not to hear Google’s appeal. Last July, the Ninth Circuit Court of Appeals upheld the 2023 federal jury verdict favoring Epic, along with the terms of Donato’s injunction.
Before making a ruling on the settlement, Judge Donato has sought briefings from the FTC and appointed an MIT economics professor as an expert witness to assist in the court’s evaluation. He has also permitted third-party briefs, including those from Microsoft, to inform the proceedings.
Microsoft’s legal team articulated a strong stance against the proposed modifications, asserting that they would effectively allow what the injunction seeks to prohibit: the mandatory implementation of Google Play Billing as a condition for accessing the Play Store. They argued that reversing the injunction would lack justification and would ultimately be contrary to the public interest.
Meanwhile, Epic Games, headquartered in Cary, North Carolina, announced on Tuesday that its games app is now accessible on Google Play worldwide, marking a significant milestone in its ongoing relationship with the platform.
