US Court Rules in Favor of Epic Games
Forced In-App Payment Ban and Global Regulations Push to the Brink
As Google lost the antitrust lawsuit over its app market, the global app market worth 660 trillion won is shaking. The court ruled that Google's forcing the use of its own in-app payment system was an anti-competitive act abusing its dominant market position, raising concerns that the global app market ecosystem dominated by some mega tech companies like Google and Apple could collapse.
The U.S. District Court in San Francisco, California, ruled unanimously on the 11th (local time) in favor of the plaintiff, Epic Games, in the antitrust lawsuit filed against Google. The nine-member jury, after less than four hours of deliberation, unanimously decided on 11 issues that "Google illegally monopolized the Play Store (in-app payment)," judging it as an unfair act due to abuse of dominant market position.
Earlier, Epic Games introduced its own payment system to avoid the up to 30% commission charged by Google and Apple but was removed from the Google Play Store and Apple App Store, leading to the lawsuit in 2020. Epic Games argued in the lawsuit that platform companies like Google and Apple monopolize 15-30% of mobile content revenue under the name of distribution fees, while developers do not receive proper compensation. They claimed that Google and Apple abused their dominant market positions to demand excessive revenue sharing, and this vulnerable distribution structure suppresses competition among app developers and hinders innovation.
In a similar lawsuit filed by Epic Games against Apple, Epic lost both the first and second trials, and the appeal is ongoing. With this recent court ruling overturning Apple's victory, the controversy over app market monopolies involving Google and Apple has entered a new phase. Mark Lemley, a professor at Stanford Law School, said, "This ruling has pierced a big hole in the massive and closed app ecosystem barriers formed by Google and Apple over the past 20 years."
Google and Apple are facing antitrust regulatory pressures from various countries, including the European Union's Digital Markets Act (DMA) effective from April next year and China's crackdown on app markets. The Wall Street Journal pointed out, "With Google's loss and strengthened antitrust regulations worldwide, the 'profit machines' of mega tech companies could derail." Depending on the final outcome of the trial, the era of monopoly enjoyed by Google and Apple with astronomical profits without regulation may end, and they could be subject to strict government controls like financial institutions.
According to mobile data analytics firm Data.ai, the app market size created by Google and Apple last year reached $503 billion (about 660 trillion won), including App Store sales and mobile advertising. Apple generates 23% of its total revenue through the app market. Tim Sweeney, founder and CEO of Epic Games who led the lawsuit, said, "If the 30% commission disappears from the app ecosystem, mobile content prices will drop, and ultimately the beneficiaries will be consumers."
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