Alphabet Inc.'s CEO, Sundar Pichai, faced the federal court witness stand for the second time in two weeks, defending against antitrust claims alleging market power abuse.
During a 90-minute testimony in San Francisco, Pichai responded to accusations from Epic Games Inc., the creator of Fortnite, claiming that Google Play employs illegal tactics to maintain dominance in the mobile-app distribution market.
Pichai's defense mirrored his stance in a recent landmark showdown with the Justice Department over Google's search engine business. He emphasized that Google has navigated fierce competition from giants like Apple Inc. and Samsung Electronics Co., asserting that any perceived consumer harm is outweighed by the benefits the company provides. The CEO's swift transition between trials underscores the intense antitrust scrutiny Google faces in the US, highlighting its ability to control crucial aspects of the online realm. Despite facing extensive questioning from Epic's lawyers on topics such as record-keeping transparency and relationships with partners, Pichai maintained a composed demeanor.
Epic sought to demonstrate that Google, initially promoting the Android operating system as an open platform, has shifted its approach in recent years. The tech giant allegedly employed revenue-sharing agreements and app developer deals to hinder rival app stores and protect its profits.
In a revealing moment, Epic compelled Pichai to disclose a closely guarded Silicon Valley secret: Google allocates a 36% share of advertising revenue from Safari browser searches to Apple. This payment secures Google as the default search engine on Macs, iPhones, and iPads. Though Pichai didn't specify the exact amount in dollars, he acknowledged that Apple received the majority of the $26.3 billion earmarked for revenue-sharing in 2021.
While the San Francisco trial may not directly threaten Alphabet's core business as the DOJ case does, a verdict favoring Epic could potentially cost the company billions in revenue. This outcome might require Google to open avenues for alternative payment and app distribution methods beyond its proprietary app store.
Epic Claims Google's Decade-Long Monopoly Tactics in Android App Market
Much like Epic's ongoing dispute with Apple over app store practices, the gaming company alleges that Google has sought to dominate the Android app distribution market for over a decade. Epic contends that Google struck deals to pay off rivals and utilized its substantial resources to eliminate competition.
Epic's legal team presented video clips from a 2011 Google developer event to highlight the significant increase in Google Play's revenue cut from app creators, now at 30%, compared to the 5% retained 12 years ago on its Chrome web browser. During the trial, Pichai stressed the considerable advancements in the quality of Google Play services, emphasizing their role in providing safety and security for users, thus building trust in applications and offering enhanced value.
Questions directed at the CEO aimed to support Epic's argument that Google's policies have created obstacles for users trying to download and install Epic's games directly from the company's servers.
Security Concerns Raised in Google Play Trial Over App Downloads
Epic contends that users face a cumbersome process when attempting to download apps directly from developers, encountering warnings on their screens about the potential risks of downloading from "unknown sources." Pichai underscored the significance of security measures, stating that precautions are vital to prevent users from being deceived into downloading malicious software. During more amicable questioning from Google's attorney, Glenn Pomerantz, Pichai addressed Epic's allegation that Google was attempting to "stifle" developer choice.
Pichai expressed that Google's mission is to "offer access to information and ensure its universal accessibility and utility." He highlighted the Android operating platform's uniqueness, emphasizing that it is "unprecedented" with the achievement of being a "free and open operating system" that has reached an unparalleled user base of two and a half billion.