Epic Games Alleges Google Employed 'Bribe And Block' Tactics To Quash Competition

In a recent development, Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) has been facing allegations by Epic Games Inc. of employing “bribe and block” strategies to stifle competition within its Google Play app marketplace, according to Bloomberg.

What Happened: The popular Fortnite game developer Epic Games has been challenging Google Play’s policies in an ongoing antitrust trial. The trial’s outcome could potentially impact the billions of dollars in revenue from Google’s app store.

Gary Bornstein, Epic’s attorney, asserted that Google’s practice of paying off rivals and preventing them from establishing their app stores resulted in inflated prices, compromised quality, and reduced consumer choices, all while boosting Google’s profits.

He said that in 2021, the Google Play Store made over $12 billion in revenue with roughly 71% profit margin. 

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On the other hand, Glenn Pomerantz, Google’s attorney, refuted the allegations, insisting that Google competes with other app stores, including Apple Inc.’s App Store. 

Pomerantz also disputed the bribery claims, explaining that the agreements were part of Google’s efforts to secure app developer support.

“Bribe is a pretty strong word,” Pomerantz said, adding, “These agreements had nothing to do with bribes.” In fact, they were “part of Google’s efforts to get the support of app developers.”

The trial, scheduled to continue into early December, is expected to feature testimonies from Alphabet CEO Sundar Pichai and Epic CEO Tim Sweeney.

The dispute began in 2020 when Epic sued Google after trying to create its app store. 

Currently, Epic is the sole entity still pursuing legal action against Alphabet, following recent settlements with consumers, state attorneys general, and Match Group Inc. 

Two years ago, Epic lost a similar case against Apple over its app store rules.

Why It Matters: The high-profile courtroom face-off between Pichai and Sweeney is centered around allegations of Google Play’s potentially monopolistic policies. This significant legal battle could alter the app marketplace’s landscape and jeopardize billions of dollars in revenue.

The outcome of this case holds the potential to set a precedent for how app marketplaces operate and compete, which could create ripples across the global tech industry.

Photo Courtesy: Shutterstock.com

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