Google to appeal Epic Games verdict to show 'Apple and Android clearly compete' (update)
Google is appealing a court ruling favoring Epic Games, which found its Play app store to be an illegal monopoly. The tech giant argues that proposed changes by Epic would harm its competition with Apple and jeopardize consumer privacy and security. Analysts estimate that implementing these changes could impact Google's operating income by about 6%. Google maintains that Android is an open platform and aims to demonstrate that it competes directly with Apple for consumers and developers.
Google (NASDAQ:GOOG) said it is appealing a court verdict ruled in favor of Epic Games and the tech giant is asking courts to pause the remedies proposed by the online game store operator, which it alleges will hurt its ability to compete with rival Apple (NASDAQ:AAPL).
In a verdict announced in December, a jury found that the search giant's Play app store is operating as an illegal monopoly.
Epic Games, in May, asked a U.S. federal court to impose changes to Android and Google Play that will allow consumers to download apps from wherever they choose without interference, whether a third-party app store or another app or the web. Google claimed those proposed changes would undermine the privacy, security, and overall experience of consumers, developers, and device manufacturers.
"As we have already stated, these changes would put consumers’ privacy and security at risk, make it harder for developers to promote their apps, and reduce competition on devices. Ultimately, while these changes presumably satisfy Epic, they will cause a range of unintended consequences that will harm American consumers, developers, and device makers," Google said in its blogpost on Monday.
"The initial decision and today’s Epic-requested changes put that at risk and undercut Android’s ability to compete with Apple’s (AAPL) iOS," Google added.
Analysts at Barclays calculate an impact of nearly $7B, which is about 6% of the company's operating income, if the remedies proposed by Epic are implemented.
"In the real world, this impact would be absorbed over time, not all at once, as many OEMs are unable to successfully sell Android devices without Google Play Services, and don’t want to risk market share loss. This could change going forward as the quality of third-party app stores improves, and the incentive to move away from Google ramps up significantly for these OEMs, given one of their primary profit pools was just cut off by the court (potentially another cut coming with Search remedies). Hence, we would expect some OEMs (including Samsung) to try as best they can to move quickly to recoup these fees with other app stores and billing systems," Barclays said in their flash commentary on October 7.
Google said in its post that "Android is an open platform that has always allowed for choice and flexibility like multiple app stores and sideloading" and, through its appeal, will try and show that the company and Apple directly compete for consumers and app developers.