Last Friday, Google asked the court overseeing the antitrust litigation brought by Epic Games and Match Group to disallow their requested pleading amendment relating to an initiative known within Google as “Project Hug.”
According to Google, the bid to alter their theory of liability comes too late and would prejudice the defendant by depriving it of the ability to conduct claim-related discovery.
Google received lawsuits over the illegality of app store policies and practices under federal and state antitrust laws beginning in August 2020, when Epic sued both it and Apple. That case is on appeal before the Ninth Circuit at both parties’ behest after the district court issued a mixed ruling but found no monopolization of the iOS app distribution market on part of Apple.
The parallel cases against Google make similar allegations: by charging up to a 30% commission on apps sold in the Play Store, in combination with other policies, Google became the only distribution channel for app developers to reach Android OS users, thereby violating the Sherman Act’s prohibition on illegal restraints of trade and monopoly.
Match’s Northern District of California suit, filed in May 2022, echoes the allegations leveled by Epic and also targets Google’s recently initiated policy requiring certain app developers use its proprietary billing system. Google responded that Match breached the parties’ agreement, a counterclaim that the court upheld in September 2022.
Now, fact discovery has closed and Google is seeking to head off Epic and Match’s attempt to “transform the case” by seeking to introduce “a fundamentally new theory of liability after the close of fact discovery and ten months after the deadline to amend the pleadings.”
According to Match’s November motion, both plaintiffs seek to add “new counts aris[ing] out of anticompetitive agreements between Google and app developers that were contemplating the launch of competing Android app stores or distributing their apps outside of Google Play.”
Match’s filing specifies that some agreements were designed to, and did, stop developers from launching competing app stores, an alleged per se violation of the antitrust laws, while others were designed to, and did, prevent developers from making Android apps available outside Google Play.
Google asserts that instead, “these agreements reflect a competitive effort by Google to provide more value to key customers in order to win their business and, in turn, enhance the value of the Play store for users.”
By arguing that Project Hug agreements violated Section 1 of the Sherman Act per se, the plaintiffs are attempting, at the eleventh hour, to dispense with the need to show anticompetitive effects or address procompetitive justifications, Google says. The opposition also alleges that the plaintiffs’ gambit tries to inject a new and different question into the mix: whether there is evidence of a tacit agreement not to compete.
In addition to being too late, Google says allowing amendment would prejudice it as it has not had the reason to seek discovery on the details of alleged horizontal agreements. Lastly, the defendant presses that the claims should not be allowed because they fail on the merits.