Epic’s Google Play Launch ‘Act of Deception,’ Says Google Counterclaim

Far from generating anticompetitive harm, as Epic Games’ Nov. 17 second amended complaint alleges, Android and Google Play “bring enormous benefits to developers and users -- and they do so at zero cost to users and minimal cost to developers in the vast majority of cases,” said Google’s answer and countersuit Thursday (docket 3:21-md-02981). Epic’s suit “threatens to undermine, rather than enhance, the very competition that has brought these benefits,” it said.

Epic’s own experience distributing its games on Android “demonstrates that competition and choice exist today,” said Google. Epic launched its popular Fortnite game franchise on Android in 2018 “without distributing it through Google Play,” it said. “Instead, Epic struck a deal with the largest Android handset manufacturer, Samsung, to have Fortnite distributed through the Samsung Galaxy Store.”

Samsung’s Galaxy app store comes preloaded on Samsung’s Android devices, said Google. Samsung manufactures about 50% of Android phones in the U.S. and 40% of all Android phones worldwide, it said.

Beyond the Galaxy Store, Android users could also download Fortnite from Epic’s website, bypassing Android app stores altogether, said Google. More than 15 million Android device users did so in the first 21 days after Fortnite’s launch, it said. Epic’s documents obtained through discovery confirm it negotiated “preloading agreements” with other OEMs, which also enables Epic to distribute its apps without using Google Play, Google said. “These facts belie Epic’s claim that it has been foreclosed from reaching Android users in any material way.”

Epic, a multibillion dollar company backed by two of the world’s largest video game developers, Tencent and Sony, “has profited immensely from the safe, secure platform provided by Google Play, a platform for which it pays a fee equivalent or less than that charged by other major platform providers,” said Google in a counterclaim. “Not satisfied with those immense profits, it entered into a legal agreement with Google with which it never intended to comply, deceiving Google and concealing its true intentions to provoke a legal and public relations confrontation that continues to this day.” Epic’s actions “have put its own users at risk, have harmed Google, and are deserving of relief” from the court, it said.

Epic “has reaped economic benefit from its relationship with Google and all of the services that Google provided to Epic,” said the Google counterclaim. “For virtually no cost to it, but at a cost to Google, Epic received benefits from Google’s services and technology which allowed Epic to bring its games, including Fortnite, to Android devices and to market and distribute its games through Google Play to tens of millions of customers.”

Epic didn't have to agree to Google’s developer distribution agreement (DDA), “but it did so with full knowledge of the agreement’s terms,” said the Google counterclaim. “Despite taking advantage of Google’s development tools, the alternate app distribution and sales channels that Android facilitates, and Google Play’s free distribution services -- all with no payment to Google -- Epic schemed willfully to violate the terms of the DDA to avoid paying Google anything at all on the fraction of transactions that would be subject to Google’s service fee.”

Epic’s “purported launch” on Google Play “was an act of deception designed to provoke litigation,” said the Google counterclaim. Epic had been working for months on a way “to conceal Epic’s payment system in an update on both Google Play and the Apple App Store,” it said. This undetected update would be through a “hotfix,” a method of app updating “without Google’s knowledge that would allow the Fortnite app to import data directly from the Epic server,” it said.

Epic “willfully breached” the DDA by submitting a version of Fortnite for publication on Google Play “with a payment method other than Google Play Billing for purchases of in-app content,” said the Google counterclaim. “By doing this, Epic denied Google its service fee under the DDA for any purchases made through the app outside of Google Play Billing.” Google seeks a court “decree” that Epic breached the DDA, and asks for an award of restitution and “disgorgement of all earnings, profits, compensation, benefits and “other ill-gotten gains obtained by Epic as a result of its conduct,” it said. Epic didn’t comment Friday.