Google Files Counterclaim in Epic Games Lawsuit - Financial Relief Sought

Google Responds to Epic Games Antitrust Lawsuit with Counterclaim

Following the appeal of the Apple v. Epic Games legal battle, Google filed a response and counterclaim on Monday afternoon concerning Epic Games’ antitrust claims against the company.

Denial of Antitrust Allegations

The technology corporation, which develops the Android operating system, refutes Epic’s accusations of anti-competitive conduct. Instead, Google asserts it is entitled to compensation due to Epic Games’ violation of the Google Play Developer Distribution Agreement (DDA).

Similarities to the Apple Case

This situation mirrors the events that unfolded with the App Store. Epic Games previously updated its application to circumvent App Store regulations and processed payments through its own system, breaching its contractual obligations with Apple.

The court in Apple’s case determined that Epic owed Apple financial restitution, amounting to $6 million.

Epic’s Actions on Google Play

The counterclaim alleges that Epic Games engaged in comparable actions on Google Play. Last year, Epic submitted a version of Fortnite to Google Play utilizing Epic’s direct payment system, bypassing Google Play Billing.

This submission was immediately rejected for non-compliance with Google’s established policies.

Deceptive Submission Tactics

Epic subsequently submitted a compliant version in April 2020, which Google now characterizes as “an act of deception designed to provoke litigation.” This version concealed Epic’s payment system within an update distributed to both Apple and Google’s app stores.

This allowed Epic to activate its own payment system via a server-side configuration change, known as a “hotfix,” without Google’s awareness.

Activation of Direct Payments and Removal from Google Play

The hotfix was implemented on August 13, 2020, enabling Fortnite users to select between Google Play Billing and Epic’s direct payment option. This action was intended to trigger the game’s removal from the app stores, facilitating Epic’s planned legal proceedings.

Google notified Epic Games on the same day that the hotfix was applied, citing violations of the DDA, Google’s Malicious Behavior Policy, and the Google Play Billing Policy. Consequently, Fortnite was removed from Google Play.

However, Epic’s account was not disabled, allowing the game maker to resubmit a compliant version.

Continued Use of Epic’s Payment System

Despite the app’s removal, Android users who had previously downloaded the game from Google Play could continue utilizing Epic’s payment system, thereby circumventing the contractually mandated service fee owed to Google, as stated in the counterclaim.

Google is requesting the court to award restitution for these lost fees, alongside other damages, legal fees, interest, and any further relief deemed appropriate.

Google’s Perspective on Epic’s Actions

“Epic, a multibillion-dollar company backed by two of the world’s largest video game developers, has profited immensely from the safe, secure platform provided by Google Play, a platform for which it pays a fee equivalent or less than that charged by other major platform providers,” the counterclaim asserts.

“Not satisfied with those immense profits, it entered into a legal agreement with Google with which it never intended to comply, deceiving Google and concealing its true intentions to provoke a legal and public relations confrontation that continues to this day. Its actions have put its own users at risk, have harmed Google, and are deserving of relief from this Court.”

Epic Games’ Response

Epic Games has declined to provide further commentary on the new filing.

Underlying Dispute: In-App Payment Systems

Epic’s core argument centers on the assertion that the requirement by Apple and Google to exclusively utilize their in-app payment systems constitutes a monopolistic practice that disadvantages developers.

In the Apple case, the court ruled that Apple should not prohibit developers from providing links to alternative payment methods within their apps or communicating these options to customers. However, it did not designate Apple as a monopoly.

Android’s Sideloading Capability

Google’s position differs, as Android permits sideloading – the installation of apps from sources outside of Google Play – providing an alternative avenue for reaching Android users and complicating an antitrust claim.

Additional Filings

Google has also submitted its response to cases involving the state’s attorney general, developers, and consumers.

2021.10.11 (000183.03) Redacted Version of Defendants’ Answers, Defenses, And Counterclaims to Ep by TechCrunch on Scribd