Epic v. Google: everything we’re learning live in Fortnite court

That’s Google, referring us to a Motorola exec’s testimony that Motorola found it was a competitive advantage to ship with Google apps.

“This is an android phone manufacturer telling you this helps us build better phones at a lower cost — this is pro competitive,” says Kravis.

Mind you, the Motorola testimony is also when we saw that Google does directly pay some OEMs not to preload rival app stores.

“Epic’s own expert admitted this is all the Android operating system itself requires for sideloading: three steps. And remember, you only have to go through this process once,” says Kravis. “He just thinks the steps should be compressed.”

“What evidence did you see during this trial that compressing three steps into two steps or one step would fix this alleged harm?” Kravis rhetorically asks the jury.

I’ve thought for a while that Epic mostly lost the sideloading argument, and Google’s really driving it home.

We’re back to Google suggesting the Galaxy Store side by side on the homescreen with the Google Play Store (as it is on modern Samsung phones) is evidence of competition.

“Those consumers choose the Play Store 83 percent of the time — this is Google winning the competition because it has a better store,” says Kravis.

Now we know why Google made this point earlier in the trial.

Kravis just showed the jury a slide showing all the ways to play Fortnite, including the PC, Nintendo Switch, cloud gaming and more.

“Professor Tucker’s market definition is the only one that accounts for all these other choices,” he says.

“What’s missing from [Epic’s economist’s] charts is all the other choices that consumers and developers have.”

Google says the evidence shows that Google competes with Apple on price, that we’ve repeatedly seen the two lower their service fees to compete with one another. “This is not the behavior of a monopolist,” Kravis tells the jury.

“We don’t dispute that Google competes with other stores on Android,” he says, only that he wants to show that competition extends to Apple. (Epic had repeatedly shown Apple wasn’t listed in Google’s internal documents about app store competitors.)

Kravis spent a decent chunk of Google’s closing argument fighting against the idea that users won’t switch between iOS and Android and ended that section once again suggesting that even if the percentage of switchers is small, the absolute number is large.

He also had a memorable line about the lag we’ve seen between apps appearing on iOS and Android: “What Purnima told you, and the evidence shows, is that app developers are like the rest of us. They have to prioritize, they have to decide which apps to build first.”

That seems straightforward enough — if jurors decide that Apple vs. Google is the relevant market. Google’s attorney suggests that because Apple has 64 percent of app store revenues, period, Google is too small to have monopoly power.

Now, he’s attempting to say that app stores are critical to phone buyers to the point that Apple competes with Google on that level:

“They take it home, they turn it on, it’s got a lousy app store on it... you don’t need a PhD in economics to know what’s going to happen next... they’re going to buy another phone.”

Kravis is going fast and fierce.

“Epic wants you to give them a deal they have not been able to get anywhere else... a deal that would effectively allow them to use the Play Store for free.”

Google’s attorney Jonathan Kravis is leading off its closing arguments, rather than Glenn Pomerantz — but he’s starting in the same place that Pomerantz’s opening arguments did.

The visual aid:

1) The Google Play Store competes with the Apple App Store

2) Consumers and app developers have choices

3) Epic has not shown that Google engaged in any anti-competitive conduct

4) Epic wants to use Google Play for free.

“What is this trial really about? Epic wants to use the Google Play Store for free,” says Kravis.

Epic’s lead attorney says if Epic wanted to make money, it would have taken Google’s old deal. Never mind that Tim Sweeney suggested Epic would make more this way...

We’re done with Epic and going straight into Google’s closing argument now.

It’s like Epic’s saying “here’s the right answer, go ahead and copy our homework!” I wonder if Google will do the same.

Epic’s lead attorney is striking through Google’s “justifications” one by one for its alleged monopoly power over Android: “Apple”, “Fragmentation”, and “Security.”

He claims that fragmentation is no longer a justification because Android was “already the monopoly operating system in smartphones” by the time Google signed its most aggressive deals with OEMs and developers in 2018, 2019, and 2020. I’m not sure I agree, but it’s an interesting thought.

Epic’s lead attorney on Google’s optimal market definition for this case, the one that Professor Tucker brought up and the judge was broadly skeptical of in court.

He’s pointing the jury to the very first question on their verdict form, where they get to decide if there’s a relevant antitrust market for this case. That’s important: if they choose that the market is anything other than Android app distribution and Android in-app payment solutions, Epic’s unlikely to win.

The screens were off for less than a minute before Bornstein began talking about (what’s admittedly the elephant in the room): Google’s deleted chats. The dark screens were a visual aid.

“Google witness after Google witness after Google witness came in here and failed to give straight answers,” he says, adding that some testimony was contradicted by documents in this case.

“As damning as the evidence is that we do have, the documents they deleted would have been even more damning,” Bornstein tells the jury.

At the beginning, he had the jury’s full attention — they were looking directly at him. Now, they’re looking down at their monitors, up, around, and one keeps closing his eyes, as Epic tries to cram in lots of evidence we’ve seen before at the same time.

It seems he knows this: “I want to go dark for a second,” he says, turning off the screens.

“People who took the Hug money had to launch only on the Google Play Store,” Epic’s Gary Bornstein begins, before stopping himself and saying that the Project Hug agreements that Google secured with game developers required them to ship simultaneously on other stores instead. “Sim-ship” isn’t nearly as compelling an argument for Epic — but it did find one Google exec’s email admitting that it was intended to disincentive other app stores.

“Some witnesses tried to tell you that contagion meant apps would leave Android and only be on iOS. That’s nonsense,” says Epic’s lead attorney. “There’s no single app that’s given up the 3 billion potential users on Android just to be on IOS.”

Having been in the courtroom every day, I have to agree: Google knew full well that the “contagion risk” it feared was from other Android app stores cutting into Google Play.

“Samsung knew what it meant,” says Bornstein, pointing out that Samsung documents show it judged the proposal as designed to “prevent unnecessary competition on store,” But though Bornstein admits Google never went through with Project Banyan, he’s attempting to show the jury that Samsung and Google were closer than competitors.

We’re looking at evidence we’ve seen before, like former Google Play Store head Jamie Rosenberg’s assertion that “any sort of rev share arrangement with Samsung is that we’d achieve structural alignment on business model.”

Epic lead attorney Bornstein on the challenged idea that a billion Android users have enabled the unknown sources sideloading flow.

“That sounded great. I wrote it down too,” he told the jury. But he says it isn’t true.

I suggested harm might be the hardest bit for Epic to prove, and Bornstein is tackling that right away by suggesting Google’s unknown sources sideloading flow kept Epic’s Fortnite downloads low. I don’t know if Epic proved that either, but this was a good quote from Bornstein today: “Google knew this was a problem, internally they knew what was happening to the Amazon app store. They knew the hurdle was too high.”

Well, technically now Epic’s attorney is saying “bribe and block,” but he’s returned to his opening argument. I’m not sure Epic proved that its Project Hug deals were outright bribes, but he’s sticking to his guns.

On “block,” he’s turning back to something his expert economists brought up, saying, “To be anticompetitive, the competition doesn’t have to be blocked entirely, it has to be impaired or limited in some way.”

Epic lead attorney Gary Bornstein’s mini-podium is pointed directly at the jury — he’s maybe 12 feet away — and he’s telling the jury that Google has become the dominant distribution for Android apps because it’s a monopoly. He says its market share makes that clear.

Epic has three claims:

monopolization

unreasonable restraints of trade

tying

He says he wants the jury to think about “power and conduct”:

“What power does Google have in the relevant market, and what conduct has Google engaged in?”

After a fortnight in Fortnite court, we’re in the home stretch: each side will make its closing arguments. Epic goes first.

Follow along live: