How could the Google Play lawsuit benefit customers and hurt the company’s shareholders?

A jury in San Francisco sided unanimously with Epic, creator of the popular ‘Fortnite’ videogame, which had accused Google of abusing its market dominance and operating its Play app store as an illegal monopoly. The Google Play Store is a cash cow for the tech firm raking in billions each year.

The verdict, if it holds, could upend the lucrative app store economy. “The dominoes are going to start falling here,” said chief executive officer of Epic Tim Sweeney. In an interview after the verdict, he predicted that “the end of 30% was insight” in reference to the cut Apple and Google take from developers to sell their wares through the app stores.

How could the Google Play lawsuit benefit customers?

Sweeney sat down with The Verge to talk about the courtroom victory and declared: “It’s a great day for all developers to see that the Sherman Antitrust Act works in the new era of tech monopolies.” Google’s Play Store along with Apple’s App Store form a duopoly and are the primary, in some case the only, route through which hundreds of millions of customers can get apps for their smartphones and devices.

Epic lost a similar lawsuit against Apple in 2021, in that case a single judge ruled in the case. The legal battles between the ‘Fortnite’ developer and the tech giants kicked off in 2020 when the game maker set up its own billing systems allowing for customers to make in-app purchases directly with Epic. This purposely violated the app stores’ rules and resulted in ‘Fortnite’ being banned from them and an antitrust lawsuit from the game maker against both.

Sweeney sees the “awesome” verdict as something that is “much needed by the industry which is being strangled by a few gatekeepers imposing insane amounts of control and extracting huge taxes.” Both Google’s and Apple’s app stores collect a commission ranging from 15 percent and 30 percent on digital transactions completed within apps.

Those commissions “not only raise prices for consumers but also make a lot of kinds of products just unviable,” he told The Verge. The head of EPIC predicts now Google will have to start making changes to how it operates its app store which will put pressure on Apple to follow suit. In the end that will mean better prices for customers and potentially increased quality and selection of products.

How could the Google Play lawsuit hurt the company’s shareholders?

The day after the verdict, Google shares had slipped less than one percent. While the company will make around $10 billion in 2023 according to estimates by analysts at Wells Fargo, its search and advertising revenue are much greater, but the app store provides fat margins.

The exact amount the company could stand to lose in app store revenue will depend on how the judge enforces the verdict. In January, the court will begin working on what remedies to implement. And those may not go into effect right away as Google plans to appeal the decision which could drag out for years.