Google countersues Epic using Apple's core arguments

Google has struck back against Epic in the ongoing antitrust litigation between the companies. This countersuit, which has to be seen in the context of Epic's other major legal fights (most notably against Apple), centres around Project Liberty, a 2020 scheme whereby Epic surreptitiously added alternative payment methods to the Android and iOS versions of Fortnite and then sued Google and Apple and launched a PR campaign intended to get the public on its side.

Epic says, essentially, that these big platform-holders are operating monopolies and, as such, they should be forced to allow developers to use their own payment systems in apps. 

The first judgement in the Epic vs Apple case is complicated, and currently being appealed. Essentially, the courts rejected all of Epic's arguments except for a single, fairly important one: that Apple should allow developers to link to alternative methods of in-app payments. This is what's being appealed by Apple, while Epic is appealing everything else, and resolution seems a long way off. What is the meaning of the word button, anyway?

Google has a much stronger starting hand than Apple, inasmuch as it doesn't operate such a closed system as iOS in the first place: Android users or developers are not forced to use Google Play in order to download or distribute apps (bypassing Google Pay's payment mechanism is a big part of this suit). Google's lawyers argue that Android "gives app developers and smartphone consumers more openness and choice than any other major competitor."

The first part of the legal document is concerned with some pretty formulaic denials of Epic's claims, and after a long list of sentences in this format—"Google denies the allegations in Paragraph 274"—Google's lawyers list nine total defenses under which they're contesting Epic's claims. Many of these cross over with Apple's defense against Epic, perhaps unsurprisingly, and again the alleged bad faith of Epic is put front-and-centre, particularly concerning it signing a developer agreement (DDA) to put Fortnite on Google Play:

"Not satisfied with those immense [Android] 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."

This confrontation is Project Liberty, and Google says Epic sought two things with it: "a systematic change which would result in tremendous monetary gain and wealth", quelle surprise, and challenging "the policies and practices of Apple and Google which are an impediment to Mr. Sweeney's vision of an oncoming metaverse."

There's an interesting fact about Fortnite's future direction here with regards to the metaverse concept (which also came up in the Apple suit): "Internally, Epic also hoped to revive and reinvigorate Fortnite by pivoting its business whereby player-developers could create new content and Epic could share a majority of profit with those creators." Whether this refers to the now reasonably common practice of allowing creators to profit from cosmetics, or something more overarchingly ambitious, remains to be seen: one of Fortnite's most serious competitors, Roblox, would be very interested to know.

To return to the matter at hand, Google says "Epic had no intention of actually complying with its agreement with Google [...] According to Epic’s own documents, the plan was simple: '[i]f we are rejected for only offering Epic’s payment solution. The battle begins. It’s going to be fun!'"

This decision to "flip the switch" and look for a fight adds further detail about what Epic thought would happen: In a board meeting, "Mark Rein, Epic's co-founder, predicted 'there’s a better than 50% chance Apple and Google will immediately remove the games from their stores the minute we do this,' and Daniel Vogel, the Chief Operating Officer, predicted 'Google and Apple will immediately pull the build for new players.'"

We also learn Epic's Tim Sweeney was basically boasting about the lawsuit in tech circles: On August 5, 2020 he emailed Microsoft to announce that "Epic has certain plans for August . . . ," and later added they would "enjoy the upcoming fireworks show." Sweeney conceded during his trial testimony in Epic v. Apple that these emails were referring to the launch of Project Liberty.

More eye-popping than this is the extent to which Epic was willing to go: Knowing that it was basically launching a surprise attack on Apple and Google, the company prepared by internally trying to 'hack' its own fix. 

"Specialized engineers and an in-house information security team attempted to hack the code to ensure that Google (and Apple) could not 'reveal the intent' of the hotfix when it was submitted," reads the suit. "Epic also used analytics to determine the number of players that would receive the hotfix once triggered."

Google adds that Epic, on top of combating Google and breaching its developer agreement, was out to fool users and paint it as the Big Bad. "Epic sued Google on the same day that it launched its external payment system in violation of the DDA, immediately after Google removed Fortnite from Google Play. Epic also began a campaign to combat negative consumer reactions that Epic knew were coming because of its conduct. For example, Epic knew that users would rightly see Epic as acting out of greed, so Epic told users '[w]hen you choose to use Epic direct payments, you save up to 20% as Epic passes along payment processing savings to you.' Epic further told consumers that if Google dropped its service fee, Epic would pass on those cost reductions to users. These statements were intended to villainize and harm Google, while distracting from Epic's breach."

Google wants a trial by jury, and it wants its right to remove Fortnite and terminate Epic's developer account under the terms of the developer agreement confirmed. With regards to that agreement, Google wants Epic found liable for breach of contract, as well as a breach of good faith, it wants the courts to declare Epic was unjustly enriched by its actions and give that money back to Google and, of course, "compensatory damages, punitive damages, attorney’s fees, and interest." The kicker is a permanent injunction against Epic trying any of this stuff with external payment methods again. This mostly follows the Apple playbook, which has already proved successful in court.

Google was always in a slightly better position than Apple to start off with, and the exact nature of the Android ecosystem is probably going to work in its favour. There can also be little argument that Epic knowingly and intentionally breached its agreements with Google: Hell, it wargamed its own Fortnite patch in preparation. The courts will decide, of course, and the arguments here are so much bigger than individual bits of bad behaviour: Who knows, in 20 years folk might think of Epic as some heroic crusader for developer rights.

One thing is for sure though: Project Liberty, the 1984-channeling 'we the people' PR campaign, was never a good look for a company valued at just under $30 billion. Epic's own prediction—that it would struggle to gain sympathy for its cause—looks prescient. It's proven true in court so far, and with much of the public.