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Epic Games’ Sweeney Takes Aim at Android’s ‘Fake Open Platform’

(Bloomberg) -- Epic Games Inc. Chief Executive Officer Tim Sweeney testified that Google’s Android operating system is a “fake open platform” in a high-stakes antitrust lawsuit over claims that the technology giant thwarts app market competition.

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Sweeney, who founded the company that makes the blockbuster Fortnite, took the witness stand Monday in San Francisco federal court to reinforce his claims that Google Play policies are unlawful and allow Alphabet Inc. to maintain a monopoly in the Android mobile-app distribution market.

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The court fight started in 2020 when Epic marketed Fortnite on Android and sidestepped the Google Play billing system and the 30% revenue cut it was taking from app developers.

“We very much wanted to avoid that and do business directly with our customers,” Sweeney told jurors.

Jury Trial

Google denies abusing its market power. The jury trial started two weeks ago and is expected to wrap up in early December. If Epic prevails, Google could be forced to allow competing app marketplaces and payment methods on its app store, threatening billions of dollars in revenue generated by Google Play.

Sweeney previously testified in a 2021 trial in a similar antitrust suit targeting Apple Inc.’s App Store policies as unfair and self-serving. Epic mostly lost that fight, which was decided by a federal judge in Oakland, California, after a trial. An appeals court upheld the judge’s ruling and Epic is now asking the US Supreme Court to review it.

The Epic CEO testified that Google tried to cut a deal with his company that he rejected and went on to strike “secret” accords with mobile device makers to maintain Google Play as the dominant Android app marketplace.

Sweeney said in 2018 he believed Android wasn’t closed to developers, but subsequently realized Google’s operating system was a “fake open platform” that was actually just as closed as he found Apple’s App Store to be in terms of policies for developers.

Sweeney told jurors that Epic isn’t seeking any monetary damages. When asked by Epic’s lawyer what he hopes the jury will decide, he said: “We want the jury to find that Google has violated the law so the court can make Google stop enforcing these policies.”

Cross-Examination

On cross-examination, Google’s lawyer Jonathan Kravis questioned Sweeney to underpin the technology company’s argument that the 30% cut is the standard fee charged to developers by gaming platforms. Kravis got Sweeney to admit that by the end of 2020 Epic paid a 30% cut to Sony Corp’s PlayStation, Microsoft’s Xbox and Nintendo consoles on $12 billion Epic earned on the three platforms.

Kravis also prompted Sweeney to acknowledge that none of the three game console makers allow developers to let users download their apps directly through websites other than Google’s Android operating system.

Epic lawyer’s Gary Bornstein later got Sweeney to clarify that Apple and Microsoft charge 0% fees to distribute Fortnite on personal computers.

A Google spokeswoman said Epic takes full advantage of Android’s distribution options by making Fortnite available for billions of Android users around the world to download through the Samsung Galaxy Store and directly through their website.

“This choice and flexibility is possible only on Android,” she said. “Android is the only major mobile platform that gives developers multiple ways to distribute apps.”

Spotify’s Deal

Earlier in the day, Don Harrison, who heads global partnerships at Google, revealed that his company had an agreement with Spotify that gave the music streaming service a generous break on developer fees: Spotify pays 0% if users opt to use the music platform’s payment system and 4% if users go with the Google Play billing system to process transactions.

Both companies agreed to invest $50 million each in a “success fund” and the music-streaming app promotes “good experiences” on Android devices, including smart watches, as part of the deal, Harrison said.

By highlighting the Spotify deal, Epic was trying to show that Google selectively offers some companies discounted rates through special partnerships, even while it generally restricts developers from offering payment methods other than Google Play billing.

Such arrangements were justified as they ensure popular apps like Spotify are accessible on and draw more users to Android phones and Google Play, Harrison said.

Tencent Holdings

Epic made $5.1 billion in revenue in 2020, Sweeney revealed when he testified in the Apple case. He founded Cary, North Carolina-based Epic in 1991, when he was still a student at the University of Maryland. It has since grown into one of the world’s biggest closely held video-game companies, with Sweeney as the majority shareholder and China’s Tencent Holdings Ltd. controlling a 40% stake.

Sweeney, whose net worth is estimated at $9.7 billion, is a long-time advocate of open software ecosystems. He’s also known for his love for hiking and conservation efforts, including purchasing land to be turned into public parks.

Since the 2017 release of the “battle royale” game Fortnite, Epic has become a household name among video-game enthusiasts and the game has more than 400 million users. The company also offers a popular suite of software used to build video games called Unreal Engine.

Read more: ‘Fortnite’ Maker Epic Games Is Cutting About 16% of Staff

The company fired 870 employees in September as it sought to rein in costs, amid layoffs across the broader technology industry, Bloomberg reported.

(Updates with cross-examination of Sweeney in ninth paragraph.)

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