The unsuccessful appeal represents a major victory for video game maker Epic Games, which launched a legal crusade targeting Google’s Play Store for Android apps and Apple’s iPhone app store nearly five years ago in an attempt to bypass exclusive payment processing systems that charged 15% to 30% commissions on in-app transactions.
Although not as lucrative as Google’s search engine or ad system, the Play Store for Android apps has long been a gold mine that generated billions of dollars in annual revenue by taking a 15% to 30% cut from in-app transactions funneled through the company’s own payment processing system.
Epic’s lawsuit “was replete with evidence that Google’s anticompetitive conduct entrenched its dominance, causing the Play Store to benefit from network effects,” the judges wrote in the decision.
Unless Google can extend the enforcement delay placed on Donato’s order issued last October, the company will have to begin an overhaul that includes making the Play Store’s entire library of more than 2 million Android apps available to would-be rivals and also help distribute the alternative options. Google has argued that the required revisions will raise privacy and security risks by exposing consumers to scam artists and hackers masquerading as legitimate app stores.
But Epic’s lawyers have ridiculed Google’s warnings about the changes as scare tactics in a desperate attempt to protect the fortunes of its corporate parent Alphabet Inc.
Besides being hit with Donato’s order, Google still faces further trouble ahead that could leave an even bigger dent in its finances.
