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Google CEO Sundar Pichai took the witness stand for the second time in a month on Tuesday, testifying in a trial about whether the company uses its popular app store to stifle competition and extort excessive fees.
Epic Games, the maker of the popular Fourteen days game, has argued in its lawsuit that Google has imposed a plethora of contractual and technical restrictions around its Android operating system that have effectively made the Play Store the only channel through which users can purchase apps. The trial began last week and is expected to go before a jury in mid-December.
Google’s Android is the most widely used mobile operating system in the world, surpassing Apple’s iOS. Epic claims that Google has entered into restrictive agreements with smartphone manufacturers and mobile networks to ensure that no serious competitors arise for its own store.
Epic has claimed that Google’s Play Store operating profit exceeded $12 billion in 2021, representing a margin of more than 70 percent.
During Tuesday’s proceedings, a lawyer for Epic Pichai asked about Google’s agreements with smartphone makers that require them to pre-install the Play Store along with a range of apps on their devices.
Pichai acknowledged that no smartphone maker other than Apple offers an alternative operating system based on Google’s Android and that the company requires pre-installation of a package of various Google apps in its contracts with device manufacturers.
Google’s contracts were also at the center of the second lawsuit the tech giant is currently embroiled in, a case brought by the U.S. Department of Justice that alleges the company abused its dominance in the search engine market. Pichai testified at that trial in late October, saying that offerings that made his search engine the default search engine on smartphones and browsers could be “very valuable.”
Pichai confirmed Tuesday that Google pays Apple about 36 percent of search revenue generated on iOS to be the default search engine on its devices. Wall Street analysts had previously estimated the company’s payments to Apple at $16 billion to $20 billion a year.
He also faced intense questioning from Epic attorney Lauren Moskowitz about the company’s policy of deleting internal employee messages. The judge presiding over the case subpoenaed Google’s chief legal officer, Kent Walker, later this week to explain the company’s apparent failure to preserve internal company messages that should be saved for possible use in litigation.
The judge has warned he could instruct the jury to assume the information Google destroyed was incriminating.
Under questioning from Epic’s lawyer, Pichai said he had followed Walker’s advice and maintained the policy of deleting internal chat history every 24 hours, introduced in 2008, before taking over as CEO.
An October 2021 message submitted to the court after Epic filed its lawsuit against the company showed Pichai asking to turn history off – even though the discussion did not involve the Play Store or Android.
“I supported all of the recommendations made by our legal and compliance teams,” Pichai said.
Later, under questioning from Google’s attorney, Pichai said he followed instructions to preserve documents related to Epic’s case and never deactivated chat history to prevent communications from appearing in court.
Pichai said Google competes “strongly” with Apple’s iOS devices and Android devices offer an important and cheaper alternative: “We enable cheaper smartphones.”
Epic has also made similar allegations of anti-competitive behavior against Apple. The two technology giants have distanced themselves Fourteen days from their respective app stores after Epic intentionally bypassed their payment methods. These payment methods charge a fee of 15 to 30 percent on digital purchases, which Epic says is too high.
In 2021, Apple largely emerged victorious, despite being ordered to adjust rules that prevent developers from directing customers to purchase outside of the App Store.
That ruling was upheld by an appeals court earlier this year, and both sides are now seeking review by the U.S. Supreme Court.