Epic CEO: Google, Apple store policies pose ‘existential’ threat ‘to all games’

SAN FRANCISCO — Epic Games CEO Tim Sweeney on Monday portrayed Google as a ruthless bully that resorts to shady tactics to protect a predatory payment system.

His portrayal came in testimony in an antitrust trial focused on Epic Games’ attempt to upend Google’s store for Android phone apps.

Sweeney’s more than two-hour stint on the witness stand in San Francisco came less than a week after Google CEO Sundar Pichai defended before the 10-member jury the way his company runs its Play Store for Android apps. It’s one of two antitrust cases against Google, whose tech empire valued at $1.7 trillion is being threatened by legal attacks seeking to break it up.

Testimony in the Android phone app case is scheduled to finish before Christmas.

• “Google is rubbing his nose in it some more:” Check out daily coverage of the Epic-Google trial at The Verge.

The other case, focused on Google’s dominant search engine, ended last week, but won’t be decided by a federal judge in Washington, D.C., until next year.

While Sweeney sought to depict Google as a greedy monopolist under questioning by his own lawyer, Google attorney Jonathan Kravis tried to flip the script. Much of Kravis’ his cross-examination appeared design to cast Sweeney as an executive primarily interested in bypassing a long-standing commission system to boost his video game company’s profits.

Epic, the maker of the popular Fortnite game, alleges that Google has been engaged in illegal price-gouging by collecting commissions ranging from 15% to 30% on in-app digital transactions. It’s similar to a payment system that Epic unsuccessfully challenged in a parallel lawsuit filed against Apple’s iPhone app store. Epic is appealing the outcome of the Apple trial to the U.S. Supreme Court.

Google CEO Sundar Pichai vs. Epic Games: Confrontational questioning in trial

Unlike Apple’s iPhone app store, Google already allows competition to the Play Store — something that Epic tried to do when it decided to roll out Fortnite for Android phones in 2018 on its own website instead of the Play Store.

In his Monday testimony, Sweeney recalled how Google called him into its Mountain View, California, headquarters to try to persuade Epic to release Fortnite in the Play Store instead. Sweeney said Google tried to entice him with a wide range of financial incentives, which he rejected.

“It seemed like a crooked arrangement,” Sweeney told the jury. “Google was proposing a series of side deals, which seemed designed to convince Epic not to compete against them.”

Sweeney’s appearance came after Epic’s lawyers had previously displayed Google documents showing Google had offered video game maker Activision Blizzard a package valued at $360 million to drop a tentative plan to compete against the Play Store.

Google’s lawyers presented other documents that outlined the deal would bring more than $315 million in benefits to Activision.

After rejecting Google’s overtures, Epic tried to distribute Fortnite for Android through its own website. But Sweeney testified that effort quickly turned into “a depressing process” because far fewer game players downloaded Fortnite for Android phones than anticipated. He attributed the disappointing response to Google machinations that made it a cumbersome process to do outside the Play Store and the use of pop-up “scare screens” warning of potential problems with the software.

Epic Games alleges ‘bribe and block’ strategy in antitrust suit against Google

“We realized Google was a difficult adversary and had the ability obstruct us,” Sweeney said.

Epic eventually released Fortnite in the Play Store in 2020 while it was hatching a secret plan to eventually circumvent the commission system by covertly slipping in an alternate payment option as part of what Sweeney dubbed “Project Liberty.”

The alternative payment option was released in August 2020 in revised Fortnite apps for both the Play Store and the iPhone app store, prompting both Apple and Google to block it within a few hours. Epic then filed antitrust lawsuits as part of what Sweeney framed as a crusade on behalf of all game makers as more play occurs on smartphones instead of consoles and PCs.

“It’s an issue I see as existential to all games, including Epic,” Sweeney said.

During his questioning of Sweeney, Google lawyer Kravis laid out the 30% commissions that Epic pays to Sony, Microsoft and Nintendo for transactions on the PlayStation, Xbox and Switch consoles without complaint while still raking in billions of dollars in profit from those platforms.

In response to a question submitted by a juror, Sweeney disclosed that video game consoles and personal computers generated more than 90% of Epic’s revenue from in-app purchases during the period in 2020 when Fortnite was also in the iPhone app store and the Play Store.

Sweeney didn’t say why Epic hasn’t mounted a challenge to the 30% commissions charge on other game-playing devices besides smartphones, but he left no doubt about his goal in this trial.

“We want the jury to find Google has violated the law so the court can force Google to stop these practices,” Sweeney said.

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