Pluralistic: An Epic antitrust loss for Google (12 Dec 2023)

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A courtroom scene cartoon from a 19th century Punch. It depicts a wigged judge making an outraged face at the defense table, while jurors laugh in the background. The defense lawyer, also in a wig, reaches out as if to stop their client. The client has been replaced with a cartoon of a figure being strangled by a boa constrictor. The boa constrictor's coils have been colored in the Google logo's colors. The figure's head has been replaced with the head of Fortnite's 'Blaze.' On the courtroom wall is a clock ticking toward's midnight. The clock's hour hand is a saber. The clock's 12 has been replaced with a millionaire pig-in-a-tophat motif, his face contorted in fear as the saber draws nearer.

An Epic antitrust loss for Google (permalink)

A jury just found Google guilty on all counts of antitrust violations stemming from its dispute with Epic, maker of Fortnite, which brought a variety of claims related to how Google runs its app marketplace. This is huge:

The mobile app store world is a duopoly run by Google and Apple. Both use a variety of tactics to prevent their customers from installing third party app stores, which funnels all app makers into their own app stores. Those app stores cream an eye-popping 30% off every purchase made in an app.

This is a shocking amount to charge for payment processing. The payments sector is incredibly monopolized and notorious for its price-gouging – and its standard (wildly inflated) rate is 2-5%:

Now, in theory, Epic doesn't have to sell in Google Play, the official Android app store. Unlike Apple's iOS, Android permit both sideloading (installing an app directly without using an app store) and configuring your device to use a different app store. In practice, Google uses a variety of anticompetitive tricks to prevent these app stores from springing up and to dissuade Android users from sideloading. Proving that Google's actions – like paying Activision $360m as part of "Project Hug" (no, really!) – were intended to prevent new app stores from springing up was a big lift for Epic. But they managed it, in large part thanks to Google's own internal communications, wherein executives admitted that this was exactly why Project Hug existed. This is part of a pattern with Big Tech antitrust: many of the charges are theoretically very hard to make stick, but because the companies put their evil plans in writing (think of the fraudulent crypto exchange FTX, whose top execs all conferred in a groupchat called "Wirefraud"), Big Tech keeps losing in court:

Now, I do like to dunk on Big Tech for this kind of thing, because it's objectively funny and because the companies make so many unforced errors. But in an important sense, this kind of written record is impossible to avoid. Any large institution can only make and enact policy through administrative systems, and those systems leave behind a papertrail: memos, meeting minutes, etc. Yes, we all know that quote from The Wire: "Is you taking notes on a fucking criminal conspiracy?" But inevitably, any ambitious conspiracy can only exist if someone is taking notes.

What's more, any large conspiracy involving lots of parties will inevitably produce leaks. Think of this as the corollary to the idea that the moon landing can't be a hoax, because there's no way 400,000 co-conspirators could keep the secret. Big Tech's conspiracies required hundreds or even thousands of collaborators to keep their mouths shut, and eventually someone blabs:

This is part of a wave of antitrust cases being brought against the tech giants. As Matt Stoller writes, the guilty-on-all-counts jury verdict will leak into current and future actions. Remember, Google spent much of this year in court fighting the DoJ, who argued that the company bribed Apple not to make a competing search engine, paying tens of billions every year to keep a competitor from emerging. Now that a jury has convicted Google of doing that to prevent alternative app stores from emerging, claims that it used these pay-for-delay tactics in other sectros get a lot more credible:

On that note: what about Apple? Epic brought a very similar case against Apple and lost. Both Apple and Epic are appealing that case to the Supreme Court, and now that Google has been convicted in a similar case, it might prompt the Supremes to weigh in and resolve the seeming inconsistencies in the interpretation of federal law.

This is a key moment in the long project to wrest antitrust away from the pro-monopoly side, who spent decades "training" judges to produce verdicts that run counter to the plain language of America's antitrust law:

There's 40 years' worth of bad precedent to overturn. The good news is that we've got the law on our side. Literally, the wording of the laws and the records of the Congressional debate leading to their passage, all militate towards the (incredibly obvious) conclusion that the purpose of anti-monopoly law is to fight monopoly, not defend it:

It's amazing to realize that we got into this monopoly quagmire because judges just literally refused to enforce the law. That's what makes one part of the jury verdict against Google so exciting: the jury found that Google's insistence that Play Store sellers use its payment processor was an act of illegal tying. Today, "tying" is an obscure legal theory, but few doctrines would be more useful in disenshittifying the internet. A company is guilty of illegal tying when it forces you to use unrelated products or services as a condition of using the product you actually want. The abandonment of tying led to a host of horribles, from printer companies forcing you to buy ink at $10,000/gallon to Livenation forcing venues to sell tickets through its Ticketmaster subsidiary.

The next phase of this comes when the judge decides on the penalty. Epic doesn't want cash damages – it wants the judge to order Google to fulfill its promise of "an open, competitive Android ecosystem for all users and industry participants." They've asked the judge to order Google to facilitate third-party app stores, and to separate app stores from payment processors. As Stoller puts it, they want to "crush Google’s control over Android":

Google has sworn to appeal, surprising no one. The Times's expert says that they will have a tough time winning, given how clear the verdict was. Whatever this means for Google and Android, it means a lot for a future free from monopolies.

Hey look at this (permalink)

A Wayback Machine banner.

This day in history (permalink)

#15yrsago Paul A. Young Fine Chocolates of London — some of the best chocolate in the world

#15yrsago Epilogue: Austin schoolteacher who didn’t believe Linux existed

#15yrsago Former Nasdaq chairman busted for running a $50 billion fraud — largest Ponzi scheme ever < href="">

#15yrsago James Boyle’s “Public Domain” — a book that balances accessibility with thoroughness; criticism with solutions

#10yrsago Stephen Harper government wants lifetime gag agreements from Canadian parliamentary staffers

#10yrsago All Norewegian books to be digitized, made available

#10yrsago Aluminum castings of ant-nests

#10yrsago US spy agency adopts globe-encircling giant octopus as new logo

#5yrsago Adam Ruins Big Tech: how monopolies, DRM, EULAs, and predatory tactics have delivered our dystopian future

#5yrsago Theresa May faces a no confidence vote today

#1yrsago Orphaned neurological implants

Colophon (permalink)

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