Image used under license from Shutterstock.com.
Google has found some reprieve against well-known game developer Epic Games in the ongoing antitrust lawsuit, Epic Games v. Samsung Electronics Co., Ltd; Samsung Electronics America Inc., and Google LLC,[1] filed recently in September 2024.[2] On October 16, 2014, Google filed a motion for appeal with the Ninth Circuit Court of Appeals to temporarily suspend the changes mandated in the ruling from the initial lawsuit.[3]
The ruling required Google to enable third-party access to Google Play and allow alternative app stores to be distributed via its Play Store by November 1, 2024, after finding Google perpetuated an unlawful monopoly in the app market arena and held anti-competitive deals; thus, violating the Sherman Antitrust Act.[4]
The U.S. Department of Justice Antitrust Division specifies that an “unlawful monopoly exists when one [entity] has market power for a product or service, and it has obtained or maintained that market power, not through competition on the merits, but because the firm has suppressed competition by engaging in anticompetitive conduct.”[5]
A perpetuator of these “unlawful acts” in turn would then be in violation of the Sherman Antitrust Act. The Sherman Antitrust Act §2 in relevant part notes that federal law prohibits the monopolization of trade or commerce, and any conspiracies to do so and prohibits “acquiring or maintaining monopoly power through improper means.”[6]
Although Google had already requested Judge James Donata for the United States District Court for the Northern District of California for an administrative stay after his initial ruling, Google doubled-down when they filed the appeal with the Ninth Circuit.[7] Just two days later, on October 18, 2024, Judge James Donata granted the partial administrative stay permitting Google to curtail the in-place permanent injunction.[8]
Google pleaded its argument for a pause imploring that the changes required by the deadline would be detrimental to the security of the Android ecosystem.[9] In a fact sheet submitted to the court, Lee-Ann Mulholland, Google’s vice president for regulatory affairs, cautioned, “Android and the Play store operate at scale and are used by many millions of American consumers every day. Rushed updates at this scale can lead to major unintended issues that affect functionality of devices, the privacy and security interests of millions of users, and the business success of device manufacturers and developers.[10]” With the pending appeal looming over the court, the administrative stay will allow for the Ninth Circuit to review Google’s request for longer stay that can ultimately take years of litigation.
Epic Games filed the original complaint on September 30, 2024, alleging Google and Samsung conspired to block users from downloading apps from third-party app distributors under the guise of “privacy and security.”[11] The complaint explains how Samsungs’ Auto Blocker, a mobile security feature, is set to On in the phone’s initial setup and as a result it disables the installation of apps from any sources other than the related app distribution platforms, Play Store and Galaxy Store.[12]
An app distribution platform is a “software distribution platform that enables software vendors and resellers to distribute software as a service (“SaaS”), infrastructure as a service (“IaaS”), and other digital offerings to customers.”[13] As a result, this type of economic platform “plays a critical role in both direct and indirect sales.”[14]
Samsung’s online website illustrates the Auto Blocker feature as “protect[ing] your Galaxy device and data by preventing the installation of applications from unauthorized sources and blocking malicious activity.”[15]
The online website further confirms and warns its users with the following language: “Only apps from authorized sources, such as the Galaxy Store or Play Store, can be installed. If you attempt to install apps from unknown or unauthorized sources, you will receive a pop-up alert, and Auto Blocker will prevent you from continuing with the installation. If the app is determined to be safe, temporarily disable this feature and try again.”[16]
The complaint further pointed out that Samsung currently does not offer an avenue for third-party store operators to qualify as an “authorized source” nor has Samsung proposed how or if it has plans to create a process to certify a third-party distributor as “safe and authorized.”[17] At the time, Epic Games’ chief executive, Tim Sweeney, propounded, “Google is pretending to keep the user safe saying you’re not allowed to install apps from unknown sources. Well, Google knows what Fortnite is as they have distributed it in the past.”[18]
Epic Games calls foul play on these “technical impediments” as a means for Google and Samsung to maintain control over the app distribution market.[19]
The initial complaint underscores this notion of “intentional market control,” and notes that “Auto Blocker is virtually guaranteed to entrench Google’s dominance over Android App Distribution, preventing third-party app stores, such as the Epic Games Store, from reaching any sizable audience on Android.[20]” Given Samsung’s 40% share of Android smartphones and over 50% of Play Store revenues, Epic Games duly emphasizes that the Auto Blocker feature “limits the ability of competing stores to achieve scale and gain network effects that would allow them to compete meaningfully with the Play Store.”[21]
This is not the first time Google has been criticized for maintaining an illegal monopoly. In 2023, Epic Games won an antitrust lawsuit against Google where the jury found that Google protected its Android app store with “competitive barriers” that “harmed both smartphone consumers and software developers.”[22] Epic Games claims that Samsung designed this new Auto Blocker feature in coordination with Google to preemptively undermine the jury’s verdict from December 2023.[23] Only time will tell whether Google remains the premier competitor in the app distribution market. As of November 1, 2024, the only measure of the initial injunction that has taken effect is that Google is prohibited from contracting with carriers that provide services and features for Android devices that block consumers from downloading competing app stores. [24] Until then, Google eagerly awaits the Ninth Circuit Court’s decision.
[1] See generally, Compl., Epic Games, Inc. v. Samsung Electronic Co., LTD, et al., Case 3:24-cv-06843, Northern District of California, https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxqyqogpx/Epic%20v%20Samsung%20-%2020240930.pdf (Filed 09/30/24).
[2] Omar Gallaga, Judge Grants Google Request to Pause Changes in Play Store, CNET, https://www.cnet.com/tech/services-and-software/judge-grants-google-emergency-stay-motion-in-epic-games-ruling/ (Oct. 21, 2024).
[3] Supra note 1.
[4] Gallaga, supra note 2.
[5] Antitrust Laws, Antritrust Division, U.S. Department of Justice, https://www.justice.gov/atr/antitrust-laws-and-you#:~:text=An%20unlawful%20monopoly%20exists%20when,by%20engaging%20in%20anticompetitive%20conduct.;
[6] U.S. Department of Justice Archives, Competition And Monopoly: Single-Firm Conduct Under Section 2 Of The Sherman Act : Chapter 1,
https://www.justice.gov/archives/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-1#:~:text=Section%202%20of%20the%20Sherman%20Act%20makes%20it%20unlawful%20for,the%20attempt%20offense%20as%20well. (Last visited: Nov. 27, 2024).
[7] Sean Hollister, On Friday, we’ll hear whether Google can delay cracking open Android, The Verge, https://www.theverge.com/2024/10/15/24270980/on-friday-well-hear-whether-google-can-delay-cracking-open-android (Oct. 15, 2024).
[8] Gallaga, supra note 2.
[9] Id.
[10] Id.
[11] Epic Games accuses Samsung and Google of scheme to block rivals, The Guardian, https://www.theguardian.com/technology/2024/sep/30/epic-games-google-samsung-lawsuit
[12] Compl., supra note 1.
[13] Software Distribution Platform, App Direct,https://www.appdirect.com/resources/glossary/software-distribution-platform (Last visited: Nov. 27, 2024).
[14] Id.
[15] Protect your Galaxy device with the Auto Blocker feature, Samsung, https://www.samsung.com/latin_en/support/mobile-devices/protect-your-galaxy-device-with-the-new-auto-blocker-feature/ (Jul. 11, 2024).
[16] Id.
[17] Compl., supra note 1.
[18] Supra note 11.
[19] Compl., supra note 1.
[20] Id.
[21] Id.
[22] Epic Games Starts A New Battle With Google And Samsung, Benzinga, https://www.benzinga.com/general/24/10/41124211/epic-games-starts-a-new-battle-with-google-and-samsung
(Oct. 1, 2024).
[23] Compl., supra note 1.
[24] Brandy Snyder, You might not see the full effects of the Epic v. Google ruling for years, Android Central,
https://www.androidcentral.com/phones/google/you-might-not-see-the-full-effects-of-the-epic-v-google-ruling-for-years (Oct. 21, 2024).