Getty Images/iStockphoto

Apple, Google face tumultuous legal year ahead

Google has agreed to make changes to its app store, while Apple has remained largely unscathed after antitrust trials challenged both companies' app store operating models.

This year marks a pivotal moment for tech giants such as Google and Apple and how the companies operate their app stores.

Both Google and Apple faced lawsuits from Fortnite creator Epic Games challenging the companies' app store operations, including the companies' hefty commission fees for offering an app in the app store and the requirement that app developers use in-app purchasing methods rather than any outside options. Both cases went through separate trials and resulted in opposite decisions. Judge Yvonne Gonzalez Rogers ruled mainly in Apple's favor in 2021, deciding that Apple did not engage in antitrust behavior on 9 out of 10 counts against the company. However, in Google's case, a jury decided in December 2023 that Google had engaged in anti-competitive conduct in its app store operation.

Despite facing the same business behavior laws, Google and Apple encountered different legal scenarios, said William Kovacic, director of the George Washington University Competition Law Center. Google faced a jury trial, while Apple's fate was in the hands of a judge, which resulted in different decisions, he said.

"The laypeople, who are the jurors, the ordinary American citizens, might interpret the evidence somewhat differently than the judge would," Kovacic said. "It's a very interesting illustration of how you can get different results, if you have a jury as opposed to simply trying the case before a judge."

Though Google plans to appeal the decision, the company is already planning changes to its app store following its settlement in September 2023 of a similar case brought by all 50 state attorneys general, the District of Columbia and Puerto Rico in 2021. And Apple isn't off the hook either, since Epic Games petitioned the Supreme Court to take its case.

What's ahead for Google, Apple

According to the settlement agreement reached with U.S. states, Google plans to simplify its sideloading process for apps outside the Google Play store. It's also planning to allow app and game developers to offer an alternate billing option alongside Google Play's billing system for in-app purchases.

Google has also agreed to pay $700 million into settlement funds for consumers.

While Google's court loss to Epic and its settlement agreement with U.S. states don't directly affect Apple, it's a situation the company will likely be watching closely in 2024, Kovacic said. Apple did partially lose the case against Epic in 2021, as Judge Gonzalez Rogers ruled that Apple had to remove policies that prohibited developers from informing users about other payment methods.

It would be a formative moment not just for the tech sector, but for competition policy generally.
William KovacicDirector, George Washington University Competition Law Center

"Apple is always going to be interested in the resolution of any case that raises an issue similar to one they face themselves," Kovacic said. "And there's always the possibility in the future that another group of plaintiffs might challenge them."

Whether Apple's app store operation is anti-competitive could come back into question, as Epic has asked the Supreme Court to weigh in. If the Supreme Court decides to take the case, it would significantly affect tech companies beyond just Google and Apple, Kovacic said.

"This would be an opportunity for them to weigh in on issues that affect lots of tech enterprises," he said. "It would be a formative moment not just for the tech sector, but for competition policy generally."

Indeed, unless the Supreme Court gets involved, the impact to Apple is minimal, said George Hay, an antitrust law professor at Cornell University.

"Apple's going to focus on what, if anything, happens in the Supreme Court," Hay said. "I don't think they're going to be directly affected by what happened in the Google case. Their basic answer is, 'We won. Unless the Supreme Court overturns it, why should we cave in just because Google lost?'"

Outside the app store trials and potential remedies for Google if its appeal against the Epic decision fails, Kovacic said big tech companies are facing a reckoning heading into 2024 through multiple lawsuits challenging different aspects of their businesses, as well as regulations such as the Digital Markets Act and Digital Services Act going into effect in the European Union.

"You literally have a cascade of challenges to the way in which they operate coming at them," Kovacic said.

Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget Editorial, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.

Next Steps

DOJ sues Apple for monopolizing smartphone market

Apple lawsuit history explained

Dig Deeper on CIO strategy

Cloud Computing
Mobile Computing
Data Center
and ESG