What Google’s antitrust defeat means for the app economy

IT TOOK less than four hours for nine jurors to reach a verdict. On December 11th in a San Francisco courthouse they unanimously agreed that Google’s app store was a monopoly and that the company had engaged in anticompetitive behaviour. The decision strikes a blow against the search giant, which is concurrently embroiled in other legal battles. It may also redefine the app-store economy.

Most smartphones run on one of two operating systems. Apple’s iOS is a walled garden with just one app store—its own. Other device-makers tend to use Google’s Android, which on paper lets in app stores other than the Google Play store. The case was about whether it does in practice. In 2020 Epic Games, a game studio, urged players to use its payments system to make purchases in “Fortnite”, its blockbuster shoot ’em up. The idea was to bypass the 30% cut taken by Apple and Google on most in-app purchases in their app stores. “Fortnite” was briefly banned from both.

Epic sued. Its lawyers argued Google was stifling competition by striking deals with, among others, smartphone-makers such as Samsung and LG, to give the Play store prime placement on their devices in exchange for a cut of revenues. The jurors did not buy Google’s defence that it competes fiercely with Apple, as well as other app stores on Android devices.

So far, so straightforward. What makes the situation strange is that the verdict is at odds with the one in Epic’s near-identical case against Apple. That concluded in 2021 with Apple winning on nine out of ten counts (on the tenth, related to the use of alternative billing systems, it lost).

One reason for the difference may be that Google’s fate was decided by a jury, not a judge. Public opinion is sceptical of big tech, which two-thirds of Americans regard as having too much power. Jurors may also struggle to grasp the nuances of antitrust laws. Another explanation is, ironically, that Google has tried to make its mobile software too open. Anyone can use Android’s open-source code free of charge to create their own OS. By contrast, Apple’s customers and developers know that it controls all aspects of the iPhone. Being locked in Apple’s walled garden may be more palatable if consumers know what they are getting into. Less so if limits are imposed by the maker of just the operating system, which it claims is open.