Opinion Epic Games vs Google: Even when Big Tech loses, it wins

Therefore, while it may seem that this decision is momentous given the global scrutiny on Big Tech, it is far more likely that it may not change anything substantial in the app ecosystem in the near future. This is because of three reasons.

First, the biggest impact of this ruling, as the first step in a regulatory process, is that it could break up Google and force its various services into distinct entities, as has been done with other monopolies in the past. But this is unlikely to happen any time soon either in the EU or the United States. The EU has traditionally been comfortable regulating (and fining) digital monopolies rather than breaking them up. New regulatory endeavours like the Digital Services Act and the Digital Markets Act recognise that there will be powerful digital entities that need to be kept in line, not done away with. Meanwhile, the US significantly lags behind EU in digital regulations. So now, if any independent agency was to undertake drastic antitrust action, it is the Federal Trade Commission chaired by Lina Khan, who is one of the most influential critics of digital monopolies. However, the FTC’s track record on tackling the monopoly power of online platforms does not reflect any success — and within the divided American polity, any future administration is unlikely to be in a strong enough position to tackle any perceived monopolisation.

Second, from the market’s perspective, Google and Apple play a very crucial role, which is that of trusted intermediaries. With millions of apps floating around, it is difficult for individual consumers to accurately judge the quality and reliability of a specific app. Google and Apple step into this vacuum as private regulators of sorts that force all apps to meet some baseline security and safety requirements to be listed on their app stores. On the other hand, these app stores make it easier for developers to reach and acquire new customers leading to faster monetisation. A completely disaggregated app ecosystem would make it difficult for individual consumers and developers to find each other in a relatively safe, secure, and economically viable manner.

Third, the app store duopoly makes it easier for governments to meet their other policy and regulatory aims. For example, the Indian government has been cracking down on unlicensed loan apps for the last 18 months. Such a measure is far easier to implement when all the government has to do is simply circulate a list of banned apps to Google and Apple to take them off their app stores. The rapid proliferation of third-party app stores with lower quality control and user protection mechanisms will make achieving the government’s aim exponentially harder. Therefore, all governments will necessarily maintain a delicate balance between the aims of their antitrust policies, and their social and economic considerations.

The fact that this seemingly momentous decision is not so momentous after all can be seen in Google’s share price, which barely budged after the jury’s decision was announced. This is not to say that there will be no changes at all because of the ruling. But these changes are likely to be mostly cosmetic (such as changing the commission rates) and unlikely to meaningfully affect the “walled garden” Google and Apple have built. Even so, this specific case, and other similar legal disputes that are bound to arise in all major jurisdictions, raise an important philosophical question that governments and regulators need to answer — are OS and app stores to be seen as mere commercial services or as utilities vital to the well-being of the digital economy? How regulators choose to answer this will decide how they engage with increasingly fraught questions of competition in the digital sphere, and what the future of our app ecosystem will be.

The writer is Managing Partner, Evam Law & Policy