In a major blow to Google's technology empire, the company has lost an antitrust lawsuit over barriers to its Android app store. A federal court jury has decided that Google's payments system was anticompetitive and caused damage to smartphone consumers and software developers. The lawsuit was brought by Epic Games, the maker of the popular Fortnite video game. This verdict is not only a win for Epic Games but also for the broader game developer community, according to analysts.

Epic Games, based in Cary, North Carolina, filed the lawsuit against Google three years ago, alleging that the internet search giant has been abusing its power to protect its Play Store from competition, in order to safeguard its lucrative revenue stream. Similar to Apple, Google collects a commission ranging from 15% to 30% on digital transactions completed within apps. Epic argued that Google's practices prevented app distributors from providing Android users with easy access to competing app stores.

The jury reached its decision after just three hours of deliberation, following two hours of closing arguments from both sides. The jury sided with Epic, with their lawyer portraying Google as a ruthless bully using a "bribe and block" strategy to discourage competition against its Play Store for Android apps. Epic's lawyer, Gary Bornstein, stated that Google made it difficult and worrisome for consumers to download Android apps from sources other than the Play Store. He compared the situation to a competition where Google got to run on a smooth track while everyone else had to run on quicksand.

Epic argued that although it is technically possible to download apps from sources other than Google's Play Store, it is too cumbersome for most people, requiring multiple steps. Furthermore, Google sends dire warnings that discourage users from even attempting to download apps from other sources. Google's lawyer, on the other hand, attacked Epic as a self-interested game maker attempting to save money at the expense of an ecosystem that has fostered competition against Apple and its iPhone.

The court's decision means that Google will now have to unwind its illegal behavior in the Play Store, as determined by U.S. District Judge James Donato. The judge will hold hearings on the issue in January. Google has announced its intention to appeal the decision, but analysts believe it faces an uphill battle. While the specific remedies Google will have to enact have not been decided yet, analysts speculate that its rivals will focus on the fees the company charges developers in its store. The judge in the Apple case barred the company from implementing "anti-steering provisions," which prevent developers from directing users to third-party payment stores outside of Apple's app store. This has resulted in a slow shift of transactions towards direct-to-consumer transactions. Analysts expect a similar trend to occur in Google's Play Store.

The verdict could potentially cost Google billions of dollars in annual profit generated from Play Store commissions. However, the company's main source of revenue, digital advertising tied to its search engine, Gmail, and other services, will not be directly affected by the outcome of the trial. Despite the loss, shares in Google's parent company, Alphabet Inc., only slipped less than 1% on Tuesday, as the stock has seen a 50% increase this year.

It is worth noting that Apple prevailed in a similar case brought by Epic against the iPhone app store. However, the 2021 trial was decided by a federal judge, and the ruling is currently under appeal at the U.S. Supreme Court. The jury in the Play Store case seemingly viewed the situation differently, even though Google technically allows Android apps to be downloaded from different stores, while Apple prohibits this on the iPhone.