


In a federal antitrust case between Epic Games and Alphabet's Google , a jury, not a judge, said Google’s app store benefited from anti-competitive behavior. The jury said Google monopolized the mobile gaming market. The jury also concluded that Google used its Android operating system to enter into anti-competitive contracts with handset makers and to collect exorbitant fees from mobile game developers, including Epic, as well as from consumers. Google charges between 15% and 30% for all digital purchases made through its app store, Google Play. The jury in the case determined that Google acquired and maintained monopoly power in the Android app ecosystem.
The jury decision is wrong on its face.
INFLATION FALLS TO 3.1% IN NOVEMBER IN POSITIVE SIGN FOR ECONOMYGoogle is not a monopolist. In the United States, Google is No. 2 in the mobile gaming market. Apple has a 58% share of the mobile gaming market, Google has just 42% . The Supreme Court has said monopoly power exists when the relevant market share is 70% or higher. Google is not a monopolist — that is a fact.
The Supreme Court in Pacific Bell Telephone v LinkLine Communications, a matter involving discriminatory pricing, said, "Businesses are free to choose with whom they will deal and the prices as well as terms and conditions of that dealing." Put simply, Google can operate its business unfettered by the government or a jury. Black letter law matters. The reaction of the stock market is also strongly suggestive that the decision of the jury will be overturned on appeal. Over the last few days, the Google share price has been essentially unchanged. Analysts had concluded that if Google were to lose the case, it could suffer a significant hit to earnings. Clearly, the market does not believe that will happen. The market believes the jury decision will be overruled on appeal.
Courts of appeal have the power to overrule decisions by a jury when the questions are matters of law, not fact. Again, as a matter of black letter law, Google is not a monopoly.
Still, there are several other disturbing features of the Google/Epic case. Earlier, Epic had filed an almost identical case against Apple and lost before a federal court of appeals. The appeals court ruled that Apple was not a monopolist with its app store. That appeals court decision is evidence that Google cannot be a monopolist when its market share of mobile gaming is smaller than Apple’s. The only substantive difference between the two cases is that the Apple case was determined by a federal appeals court and the Google case was determined by a jury. The federal appeals court knew black letter law. The jury did not.
Legal experts have long argued that antitrust cases are too complex for the typical man or woman with no training or expertise. In addition, legal experts say jurors are too often swayed by emotion and not by the law. But the purpose of U.S. antitrust law is economic efficiency — it is not economic populism. It is also disturbing that the media seemingly have uniformly cheered the jury’s decision.
The mass media are anti-business and ill-informed on basic antitrust law, especially its purpose and what constitutes a monopoly and monopolistic behavior. Google is not a monopolist. It is free to run its business as it chooses. It is free to engage in bare knuckles competition. Populism has no place in the business world or in courts of law.
CLICK HERE TO READ MORE FROM RESTORING AMERICAJames Rogan is a former U.S. foreign service officer who later worked in finance and law for 30 years. He writes a daily note on finance and the economy, politics, sociology, and criminal justice