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Brian C. Rocca, S.B. #221576
brian.rocca@morganlewis.com
Sujal J. Shah, S.B. #215230
sujal.shah@morganlewis.com
Michelle Park Chiu, S.B. #248421
michelle.chiu@morganlewis.com
Minna Lo Naranjo, S.B. #259005
minna.naranjo@morganlewis.com
Rishi P. Satia, S.B. #301958
rishi.satia@morganlewis.com
MORGAN, LEWIS & BOCKIUS LLPOne Market, Spear Street Tower
San Francisco, CA 94105
Telephone: (415) 442-1000

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Richard S. Taffet, pro hac vicerichard.taffet@morganlewis.com
MORGAN, LEWIS & BOCKIUS LLP
101 Park Avenue
New York, NY 10178
Telephone: (212) 309-6000
Ian Simmons, pro hac viceisimmons@omm.com
Benjamin G. Bradshaw, S.B. #189925
bbradshaw@omm.com
O’MELVENY & MYERS LLP
1625 Eye Street, NW
Washington, DC 20006
Telephone: (202) 383-5300

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Attorneys for Defendants

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Kyle W. Mach, S.B. #282090
kyle.mach@mto.com
Justin P. Raphael, S.B. #292380
justin.raphael@mto.com
Emily C. Curran-Huberty, S.B. #293065
emily.curran-huberty@mto.com
Marianna Y. Mao, S.B. #318070
marianna.mao@mto.com
MUNGER, TOLLES & OLSON LLP
560 Mission Street, Twenty Seventh Floor
San Francisco, California 94105
Telephone: (415) 512-4000
Jonathan I. Kravis, pro hac vice
jonathan.kravis@mto.com
MUNGER, TOLLES & OLSON LLP
601 Massachusetts Avenue NW, Suite 500E
Washington, D.C. 20001
Telephone: (202) 220-1100
Daniel M. Petrocelli, S.B. #97802
dpetrocelli@omm.com
Stephen J. McIntyre, S.B. #274481
smcintyre@omm.com
O’MELVENY & MYERS LLP
1999 Avenue of the Stars
Los Angeles, California 90067
Telephone: (310) 553-6700

UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF CALIFORNIASAN FRANCISCO DIVISION22

IN RE GOOGLE PLAY STOREANTITRUST LITIGATION

23

THIS DOCUMENT RELATES TO:

24

Epic Games, Inc. v. Google LLC, et al., Case
No. 3:20-cv-05671-JD

25

Glenn D. Pomerantz, S.B. #112503
glenn.pomerantz@mto.com
Kuruvilla Olasa, S.B. #281509
kuruvilla.olasa@mto.com
MUNGER, TOLLES & OLSON LLP
350 South Grand Avenue, Fiftieth Floor
Los Angeles, California 90071
Telephone: (213) 683-9100

Case No. 3:21-md-02981-JD
DEFENDANTS’ ANSWERS,
DEFENSES, AND COUNTERCLAIMSTO EPIC GAMES, INC.’S FIRSTAMENDED COMPLAINT FOR
INJUNCTIVE RELIEF
DEMAND FOR JURY TRIAL

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27
28
ANSWER AND COUNTERCLAIMS
Case Nos. 3:20-cv-05671-JD; 3:21-md-02981-JD

Case 3:20-cv-05671-JD Document 182 Filed 10/11/21 Page 2 of 43***REDACTED VERSION OF DOCUMENT SOUGHT TO BE SEALED***INTRODUCTION

1
2Android, Google’s open-source mobile operating system (“OS”), is a critical source of

3competition against other operating systems, such as Apple’s iOS. This competition has brought

4tremendous benefits to developers and users. By providing Android to smartphone manufacturers

5

for free, Google has expanded access to smartphones and the marketplace for mobile apps,

6

creating enormous incentives for developers to invest in apps that make virtually every sector of7

the American economy more efficient, affordable, and accessible for users. These benefits have8

typically come at little or no cost to manufacturers, developers, or users.

9

Google also offers an app store, Google Play, which works on Android. But unlike

10competitors like Apple, Google does not require Android users or developers to use Google Play11

in order to download, install, or distribute apps on Android. Rather, Google gives app developers

12

and smartphone consumers more openness and choice than any other major competitor. Most

13

Android phones in and outside the United States come preloaded with more than one app store,

14

and consumers can download apps directly from a developer’s website if they choose via

15

sideloading. Consumers and developers don’t have to use Google Play, they choose to use it

16

when given a choice among Android app stores and distribution channels. Google supports that17

choice through Android itself, Google Play’s policies, and Google’s agreements with developers

18

and device manufacturers.

19

Ironically, Epic’s own experience distributing its games on Android demonstrates that20

competition and choice exist today. In 2018, Epic launched its popular Fortnite game on Android

21

without distributing it through Google Play. Instead, Epic struck a deal with the largest Android

22

handset manufacturer, Samsung, to have Fortnite distributed through the Samsung Galaxy Store.

23

Samsung’s Galaxy app store comes preloaded on Samsung’s Android devices; approximately 50

24percent of Android phones in the United States are manufactured by Samsung (and approximately

25

40 percent worldwide). Beyond the Galaxy Store, Android users could also download Fortnite

26

from Epic’s website, bypassing Android app stores altogether; over 15 million Android device

27

users did so in the first 21 days after Fortnite’s launch. And Epic’s documents confirm that it has

28

negotiated preloading agreements with other original equipment manufacturers (“OEMs”), whichANSWER AND COUNTERCLAIMS
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Case 3:20-cv-05671-JD Document 182 Filed 10/11/21 Page 3 of 43***REDACTED VERSION OF DOCUMENT SOUGHT TO BE SEALED***1also enables Epic to distribute its apps without using Google Play. These facts belie Epic’s claim

2that it has been foreclosed from reaching Android users in any material way.

3

Far from generating anticompetitive harm, Android and Google Play bring enormous

4

benefits to developers and users—and they do so at zero cost to users and minimal cost to5

developers in the vast majority of cases. Epic’s suit threatens to undermine, rather than enhance,6

the very competition that has brought these benefits.
RESPONSE TO NUMBERED PARAGRAPHS

7
8
9
10

The section headings in the Complaint do not require a response. To the extent that thesection headings contain allegations requiring a response, Google denies all such allegations.
1.

Defendants Google LLC, Google Ireland Limited, Google Commerce Ltd., Google

11

Asia Pacific Pte. Limited, and Google Payment Corp. (collectively “Google”) deny the12allegations in Paragraph 1, except admit that Google LLC was founded in 1998 as an exciting

13

young company. Google refers the Court to the cited documents for a complete and accurate

14

statement of their contents.

15

2.

Google admits that Google LLC acquired the Android mobile operating system in

162005 and that Android is an open ecosystem that, at its core, has always been about openness.

17

Google denies the remaining allegations in Paragraph 2, and respectfully refers the Court to the18

cited documents for a complete and accurate statement of their contents.

19
20
21
22
23

3.

Google denies the allegations in Paragraph 3, except admits that Epic purports tobring claims under Sections 1 and 2 of the Sherman Act and under California law.
4.

Google denies the allegations in Paragraph 4, except admits that Epic does notseek monetary compensation from this Court and purports only to seek injunctive relief.
5.

Google denies the allegations in Paragraph 5, except avers that Google provides

24

benefits to developers, including Epic, including discoverability made possible by distribution, e-

25

learning opportunities, free tools for developers to effectively build apps for Android devices,26

testing and monitoring tools, and a global digital payment infrastructure to enable developers to27transact with users using the most effective payment methods regardless of where the developers

28-3ANSWER AND COUNTERCLAIMS
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or users are located. Google further avers that Google has enabled developers to create revenue

2

streams for themselves.

3

6.

Google denies the allegations in Paragraph 6.

47.

Google denies the allegations in Paragraph 7, except avers that Android users and5developers already have access to its open ecosystem, and further avers that Android users multi-

6home. Google is without knowledge or information sufficient to form a belief as to the truth of7

the allegations in Paragraph 7 about the PC ecosystem.

88.

Google admits the allegations in Paragraph 8.

99.

Google denies the allegations in Paragraph 9, except admits, on information and

10

belief, that Epic develops and distributes applications, operates a store for the distribution of apps,11

and develops and licenses Unreal Engine, but is without knowledge or information sufficient to12

form a belief as to the truth of the remaining allegations in Paragraph 9 about Epic’s products and13

operations.

14

10.

Google admits that Epic develops multiple apps, including Fortnite and others, but

15

is without knowledge or information sufficient to form a belief as to the truth of the remaining

16

allegations in Paragraph 10.

17

11.

Google admits that Fortnite offers multiple modes and is free to download and18

experience, and avers that Fortnite has open to it, and uses, an array of monetization strategies,

19

but is without knowledge or information sufficient to form a belief as to the truth of the remaining

20

allegations in Paragraph 11, including the number of Fortnite users.

21

12.

Google admits that Epic operates the Epic Games Store, which makes available for22

download certain popular gaming and non-gaming applications, but is without knowledge or23

information sufficient to form a belief as to the truth of the remaining allegations in Paragraph 12

24

about the operations of the Epic Games Store.

25

13.

Google admits that Epic’s Unreal Engine is a graphics engine that, on information

26

and belief, has been used by game developers and in television productions, and that Unreal

27

Match 3 and Action RPG Game Sample are available in the Google Play Store, but is without

28-4ANSWER AND COUNTERCLAIMS
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2

Paragraph 13.

314.

Google denies the allegations in Paragraph 14, except admits that smart mobile

4

devices generally use an operating system to provide core device functionality and to enable the5operation of programs.

6
7
8
9

15.

Google denies the allegations in Paragraph 15, and avers that Android OS is usedby billions of users the world over, and provides access to over 3 million compatible apps.
16.

Google denies the allegations in Paragraph 16, except admits that companies thatdesign and sell smart mobile devices are known as OEMs.

10

17.

Google denies the allegations in Paragraph 17.

11

18.

Google denies the allegations in Paragraph 18, except admits that one or more of12

the defendants have agreements with OEM partners, and respectfully refers the Court to the cited

13

documents for a complete and accurate statement of their contents.

14

19.

Google denies the allegations in Paragraph 19, and respectfully refers the Court to15

the cited document for a complete and accurate statement of its contents. Google is without

16

knowledge or information sufficient to form a belief as to the truth of the allegations in Paragraph17

19 regarding what OnePlus told Epic.

18

20.

Google denies the allegations of Paragraph 20 insofar as it purports to represent

19

the content of any Google license agreement with LG, and is without knowledge or information20

sufficient to form a belief as to the truth of the remaining allegations in Paragraph 20.

21
22
23
24

21.

Google denies the allegations in Paragraph 21, and respectfully refers the Court tothe cited document for a complete and accurate statement of its contents.
22.

Google denies the allegations in Paragraph 22, and respectfully refers the Court tothe cited document for a complete and accurate statement of its contents.

25

23.

Google denies the allegations in Paragraph 23.

26

24.

Google denies the allegations in Paragraph 24.

27
28-5ANSWER AND COUNTERCLAIMS
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25.

Google is without knowledge or information sufficient to form a belief as to thetruth of the allegations in Paragraph 25.
26.

Google denies the allegations in Paragraph 26, and avers that, during the time4

period when Epic distributed Fortnite through Google Play, Android Fortnite users had the choice

5

whether to make purchases using Google Play’s billing system (“Google Play Billing”) or another6

mechanism because it was possible to purchase Fortnite virtual currency outside of Google Play7

for use in the version of Fortnite available on Google Play.

8

27.

Google denies the allegations in Paragraph 27, except admits that one or more

9

defendants receive a payment for in-app purchases with respect to apps distributed through10

Google Play, and charge up to 30% as a service fee. Google avers that beginning on January 1,

11

2018, the service fee on subscriptions was reduced from 30% to 15% in the second year. Google

12

further avers that beginning on July 1, 2021, the service fee was reduced to 15% for the first $1

13

million of revenue on digital goods or services every developer earns each year.

14

28.

Google denies the allegations in Paragraph 28.

15

29.

Google denies the allegations in Paragraph 29, except avers that when Epic

16

launched Fortnite on Android outside of the Google Play Store, a security vulnerability was

17

discovered in the Fortnite installer.

18
19
20

30.

Google denies the allegations in Paragraph 30, except admits that Epic met with

one or more of the defendants to discuss launching Fortnite on Google Play.
31.

Google denies the allegations in Paragraph 31, except admits that on August 13,

21

2020, Epic breached the Google Play Developer Distribution Agreement (“DDA”) between Epic

22

and Google LLC, Google Ireland Limited, Google Commerce Ltd., and Google Asia Pacific Pte.,23

dated June 12, 2020, by allowing Fortnite users who downloaded the app through Google Play to

24

use Epic’s own payment processing tool instead of Google Play Billing. Google further avers

25

that for Fortnite transactions processed through Epic’s own payment processing tool, Google is26

paid nothing for its intellectual property or for app distribution.

27
28-6ANSWER AND COUNTERCLAIMS
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32.

Google denies the allegations in Paragraph 32, except admits that Fortnite was2removed from Google Play on August 13, 2020 as a result of Epic’s breach of the terms of its

3

contract with Google LLC, Google Ireland Limited, Google Commerce Ltd., and Google Asia

4

Pacific Pte., and avers that Epic’s deception and fraud were planned and executed over a period

5of many months. Google further avers that Fortnite users can continue accessing Fortnite using

6

their existing accounts through channels other than Google Play.

7

33.

Google denies the allegations in Paragraph 33.

834.

Google denies the allegations in Paragraph 34, except admits that Epic seeks

910

injunctive relief, but denies that such relief is appropriate.
35.

Google admits that Epic is a Maryland corporation and purports to maintain its

11

principal place of business in Cary, North Carolina, but is without knowledge or information

12

sufficient to form a belief as to the truth of the remaining allegations in Paragraph 35.

13

36.

Google denies the allegations in Paragraph 36, except admits that Google LLC is a

14

limited liability company organized and existing under the laws of the State of Delaware with its

15

principal place of business in Mountain View, California, and that Google LLC is a party to the16

DDA. Google further admits that Google LLC is a subsidiary of XXVI Holdings Inc., which is a

17

Delaware corporation and a subsidiary of Alphabet Inc. Google further admits that Alphabet Inc.

18

is a publicly traded company that is incorporated and existing under the laws of the State of

19

Delaware and that maintains its principal executive offices in Mountain View, California.

20

37.

Google denies the allegations in Paragraph 37, except admits that Google Ireland

21

Limited is organized under the laws of Ireland with its principal place of business in Dublin,

22

Ireland, is a subsidiary of Google LLC, and is a party to the DDA.

23

38.

Google denies the allegations in Paragraph 38, except admits that Google

24

Commerce Ltd. is organized under the laws of Ireland with its principal place of business in25

Dublin, Ireland and is a party to the DDA.

26
27
28

-7ANSWER AND COUNTERCLAIMS
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39.

Google denies the allegations in Paragraph 39, except admits that Google Asia

2

Pacific Pte. Ltd. is organized under the laws of Singapore with its principal place of business in

3

Mapletree Business City, Singapore and is a party to the DDA.

440.

Google denies the allegations in Paragraph 40, except admits that Google Payment

5Corp. is a Delaware corporation with its principal place of business in Mountain View, California

6and is a subsidiary of Google LLC.

7
8
9

41.

The allegations in Paragraph 41 are legal conclusions not subject to admission ordenial. To the extent a response is required, Google does not dispute subject matter jurisdiction.
42.

The allegations in Paragraph 42 are legal conclusions not subject to admission or10

denial. To the extent a response is required, Google does not dispute—for purposes of this action

11

only—the personal jurisdiction of this Court, but Google otherwise denies the allegations in

12

Paragraph 42.

13

43.

Google denies the allegations in Paragraph 43, except admits that each of the

14

defendants, except Google Payment Corp., is a party to the DDA, to which document Google

15

respectfully refers the Court for a complete and accurate statement of its contents. Google further

16

avers that the allegations in the fourth sentence are legal conclusions not subject to admission or17

denial, and to the extent a response is required, Google does not dispute—for purposes of this18

action only—personal jurisdiction of this Court.

19

44.

Google denies the allegations in Paragraph 44, except admits that Google Payment

20

Corp. is party to a Google Payments—Terms of Service—Seller Agreement with Epic, and21

Google respectfully refers the Court to the cited document for a complete and accurate statement22of its contents. Google further avers that the allegations in the fourth sentence are legal

23

conclusions not subject to admission or denial, and to the extent a response is required, Google

24

does not dispute—for purposes of this action only—personal jurisdiction of this Court.

25
26

45.

The allegations in Paragraph 45 are legal conclusions not subject to admission ordenial. To the extent a response is required, Google does not dispute—for purposes of this action

27
28-8ANSWER AND COUNTERCLAIMS
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only—the venue of this action, and respectfully refers the Court to the quoted document for a2

complete and accurate statement of its contents.

3
4

46.

The allegations in Paragraph 46 are legal conclusions not subject to admission ordenial. To the extent a response is required, Google denies the allegations in Paragraph 46.

547.

Google denies the allegations in Paragraph 47.

648.

Google denies the allegations in Paragraph 48, except admits that smart mobile

7

devices are handheld, portable electronic devices that can connect wirelessly to the Internet and8are capable of multi-purpose computing functions.

949.

Google admits the allegations in Paragraph 49.

10

50.

Google denies the allegations in Paragraph 50, except admits that OEMs may

11

select an OS for devices they manufacture and ensuring compatibility between mobile devices

12

and an OS may require some time and investment.

13

51.

Google denies the allegations in paragraph 51, except admits that most mobile

14

device manufacturers do not develop their own OSs. Google is without knowledge or15

information sufficient to form a belief as to the truth of the allegations in Paragraph 51 about

16

Apple.

17

52.

Google denies the allegations in Paragraph 52.

18

53.

Google denies the allegations in Paragraph 53.

19

54.

Google denies the allegations in Paragraph 54.

20

55.

Google denies the allegations in Paragraph 55.

21

56.

Google admits the allegations in Paragraph 56.

22

57.

Google denies the allegations in Paragraph 57, except admits that mobile

23

ecosystems benefit from substantial network effects and avers that both developers and users can

24

and do multi-home—i.e., use multiple channels for distributing and accessing apps.

25

58.

Google admits the allegations in Paragraph 58.

26

59.

Google denies the allegations in Paragraph 59.

27

60.

Google denies the allegations in Paragraph 60.

28-9ANSWER AND COUNTERCLAIMS
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1

61.

Google denies the allegations in Paragraph 61.

262.

Google denies the allegations in Paragraph 62, and respectfully refers the Court to3
4

the cited documents for a complete and accurate statement of their contents.
63.

Google denies the allegations in Paragraph 63, except admits that one or more of5

the defendants have agreements called Mobile Application and Distribution Agreements

6(“MADAs”) and optional revenue sharing agreements with some OEM partners, and respectfully

7

refers the Court to the cited documents for a complete and accurate statement of their contents.

864.

Google denies the allegations in Paragraph 64.

965.

Google admits that mobile apps expand the usefulness and value of mobile devices

10

but is without knowledge or information sufficient to form a belief as to whether “a smartphone

11

or tablet is the only way to access [certain] functions” for “many consumers.”

12

66.

Google denies the allegations in Paragraph 66, except admits that Android users

13

download and install Android-compatible mobile apps through the Google Play Store and it

14

would be undesirable for OEMs to load their devices with unwanted apps.

15
16
17

67.

Google denies the allegations in Paragraph 67, and respectfully refers the Court tothe cited documents for a complete and accurate statement of their contents.
68.

Google denies the allegations in Paragraph 68, except admits that the “direct18

downloading of apps” is sometimes called “sideloading” and avers that multiple app stores and19

access points to apps exist, as users can and do multi-home in accessing apps.

20

69.

Google denies the allegations of Paragraph 69 except admits that “[a]pp stores21

allow consumers to easily browse, search for, access reviews on, purchase (if necessary),22

download, and install mobile apps, using the mobile device itself and an Internet connection.”

23

70.

Google denies the allegations of Paragraph 70.

24

71.

Google denies the allegations in Paragraph 71.

25

72.

Google denies the allegations of Paragraph 72.

26

73.

Google denies the allegations in Paragraph 73.

27

74.

Google denies the allegations in Paragraph 74.

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1

75.

Google denies the allegations in Paragraph 75.

276.

Google denies the allegations in Paragraph 76, and respectfully refers the Court to3

the cited documents for a complete and accurate statement of their contents.

477.

Google denies the allegations in Paragraph 77.

578.

Google denies the allegations in Paragraph 78, except admits that Google Play

6

offers over 3 million apps, and that the large number of apps available through Google Play

7

attracts users, as well as developers who choose to offer apps on Google Play because of the8benefit of free distribution and discoverability that Google Play provides.

979.

Google denies the allegations in Paragraph 79.

10

80.

Google denies the allegations in Paragraph 80, and avers that users have the option

11of using different platforms to access their apps, and that Apple and Google compete vigorously

12in the mobile operating system environment on multiple dimensions, including innovation, price,13

privacy, and security.

14

81.

Google denies the allegations in Paragraph 81, and avers that users select their15

mobile device for many reasons, including that users prefer a mobile device with an app store pre-16

installed, and that users want a secure mobile device. Google also avers that evidence shows that17

users can and do switch and multi-home among and between mobile and nonmobile ecosystems,

18

including between Android and iOS.

19

82.

Google denies the allegations in Paragraph 82.

20

83.

Google denies the allegations in Paragraph 83.

21

84.

Google denies the allegations in Paragraph 84.

22

85.

Google denies the allegations in Paragraph 85.

23

86.

Google denies the allegations in Paragraph 86.

24

87.

Google denies the allegations in Paragraph 87, except admits that one or more of25

the defendants have an agreement with Apple in which Apple agrees to distribute Google

26

products and earns revenue from that agreement; Google respectfully refers the Court to the cited

27

documents for a complete and accurate statement of their contents. Google avers that: (1)28- 11 ANSWER AND COUNTERCLAIMS
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Google competes vigorously with Apple across numerous dimensions of competition; and (2)2Google has an interest in its partners selling more Android phones in order to better compete with

3

Apple.

4
5

88.

Google denies the allegations in Paragraph 88, and respectfully refers the Court tothe cited documents for a complete and accurate statement of their contents.

6

89.

Google denies the allegations in Paragraph 89.

790.

Google denies the allegations in Paragraph 90.

891.

Google denies the allegations in Paragraph 91, and respectfully refers the Court to9

the cited documents for a complete and accurate statement of their contents. Google admits that10

mobile manufacturers have a choice whether to enter into a MADA to distribute devices with

11

proprietary Google apps, including the Google Play Store, and that these agreements contain

12

various provisions regarding placement of certain Google apps for the initial out-of-the-box

13

settings, though the specific terms have changed over time.

14

92.

Google denies the allegations in Paragraph 92.

15

93.

Google denies the allegations in Paragraph 93, and respectfully refers the Court to

16
17
18

the cited documents for a complete and accurate statement of their contents.
94.

Google denies the allegations in Paragraph 94, and respectfully refers the Court tothe cited documents for a complete and accurate statement of their contents.

19

95.

Google denies the allegations in Paragraph 95.

20

96.

Google denies the allegations in Paragraph 96, and respectfully refers the Court to21
22

the cited documents for a complete and accurate statement of their contents.
97.

Google denies the allegations in Paragraph 97, except admits that in 2018, Epic

23

decided to launch Fortnite on Android outside of Google Play, and respectfully refers the Court

24

to the cited documents for a complete and accurate statement of their contents. Google is without

25

knowledge or information sufficient to form a belief as to the truth of the allegations in Paragraph26

97 about Epic’s agreement with Samsung.

27
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5
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9

98.

Google denies the allegations in Paragraph 98, and respectfully refers the Court tothe cited documents for a complete and accurate statement of their contents.
99.

Google denies the allegations in Paragraph 99, and respectfully refers the Court tothe cited documents for a complete and accurate statement of their contents.
100.

Google denies the allegations in Paragraph 100, and respectfully refers the Court

to the cited documents for a complete and accurate statement of their contents.
101.

Google denies the allegations in Paragraph 101, and respectfully refers the Court

to the cited documents for a complete and accurate statement of their contents.
102.

Google denies the allegations in Paragraph 102, and respectfully refers the Court

10

to the cited documents for a complete and accurate statement of their contents. Google is without

11

knowledge or information sufficient to form a belief as to the truth of the allegations in Paragraph12

102 regarding Epic’s deal with Samsung.

13
14

103.

Google denies the allegations in Paragraph 103, and respectfully refers the Court

to the cited documents for a complete and accurate statement of their contents.

15

104.

Google denies the allegations in Paragraph 104.

16

105.

Google denies the allegations in Paragraph 105, except admits that one or more of17

the defendants offer a Premier Device Program. Google respectfully refers the Court to the cited18

documents for a complete and accurate statement of their contents.

19

106.

Google admits that one or more of the defendants executed an RSA with HMD

20

Global, effective December 1, 2019, and respectfully refers the Court to the agreement for a21

complete and accurate statement of its contents.

22
23
24
25
26
27
28

107.

Google denies the allegations in Paragraph 107, and respectfully refers the Court

to the cited document for a complete and accurate statement of its contents.
108.

Google denies the allegations in Paragraph 108, and respectfully refers the Court

to the cited documents for a complete and accurate statement of their contents.
109.

Google denies the allegations in Paragraph 109, and respectfully refers the Court

to the cited document for a complete and accurate statement of its contents.
- 13 ANSWER AND COUNTERCLAIMS
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1
2
3

110.

Google denies the allegations in Paragraph 110, and respectfully refers the Court

to the cited document for a complete and accurate statement of its contents.
111.

Google denies the allegations in Paragraph 111, except admits that one or more of4

the defendants offer Mobile Incentive Agreements, but avers that participation in the Foundation

5

Tier Device program is optional, that enrollment is on a device-by-device basis, and that only a6very small percentage of active devices are covered by the Foundation Tier Device program.

7

Google respectfully refers the Court to the cited documents for a complete and accurate statement

8of their contents.

9

112.

10
11

Google denies the allegations in Paragraph 112, and respectfully refers the Court

to the cited documents for a complete and accurate statement of their contents.
113.

Google denies the allegations in Paragraph 113, respectfully refers the Court to the12

cited documents for a complete and accurate statement of their contents, and is without

13

knowledge or information sufficient to form a belief as to the truth of the allegations in Paragraph14

113 regarding what OnePlus told Epic.

15

114.

Google denies the allegations in Paragraph 114, and is without knowledge or16

information sufficient to form a belief as to the truth of the allegations in Paragraph 114 regarding

17

what LG told Epic.

18

115.

Google denies the allegations in Paragraph 115, and respectfully refers the Court

19

to the cited documents for a complete and accurate statement of their contents. Google also avers

20

that participation in the Premier Device Program is optional, and that only a very small

21

percentage of active devices are covered by the Premier Device Program.

22

116.

Google denies the allegations in Paragraph 116.

23

117.

Google denies the allegations in Paragraph 117, and respectfully refers the Court

24
25
26

to the cited documents for a complete and accurate statement of their contents.
118.

Google denies the allegations in Paragraph 118, and respectfully refers the Court

to the cited documents for a complete and accurate statement of their contents.

27
28- 14 ANSWER AND COUNTERCLAIMS
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1
2
3
4
5

119.

Google denies the allegations in Paragraph 119, and respectfully refers the Court

to the cited documents for a complete and accurate statement of their contents.
120.

Google denies the allegations in Paragraph 120, and respectfully refers the Court

to the cited documents for a complete and accurate statement of their contents.
121.

Google denies the allegations in Paragraph 121, except admits that it did not

6

pursue Project Banyan. Google respectfully refers the Court to the cited documents for a7

complete and accurate statement of their contents.

8

122.

Google denies the allegations in Paragraph 122.

9

123.

Google denies the allegations in Paragraph 123, except admits that DDA, Section

10

4.5 states, “You may not use Google Play to distribute or make available any Product that has a11

purpose that facilitates the distribution of software applications and games for use on Android

12

devices outside of Google Play.” Google respectfully refers the Court to the cited documents for13

a complete and accurate statement of their contents.

14

124.

Google denies the allegations in Paragraph 124, except admits that each of the

15

Defendants, except Google Payment Corp., is a party to the DDA and that DDA, Section 4.5

16

states, “You may not use Google Play to distribute or make available any Product that has a17

purpose that facilitates the distribution of software applications and games for use on Android

18

devices outside of Google Play.” Google respectfully refers the Court to the cited documents for19

a complete and accurate statement of their contents.

20

125.

Google denies the allegations in Paragraph 125, except admits that DDA, Section

21

4.5 states, “You may not use Google Play to distribute or make available any Product that has a22

purpose that facilitates the distribution of software applications and games for use on Android

23

devices outside of Google Play.” Google respectfully refers the Court to the cited documents for24

a complete and accurate statement of their contents.

25

126.

Google denies the allegations in Paragraph 126.

26
27
28

- 15 ANSWER AND COUNTERCLAIMS
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1

127.

Google denies the allegations in Paragraph 127, except admits that one or more of2

the defendants offer an App Campaigns program, and respectfully refers the Court to the cited

3

documents for a complete and accurate statement of their contents.

4
5

128.

Google denies the allegations in Paragraph 128, and respectfully refers the Court

to the cited documents for a complete and accurate statement of their contents.

6

129.

Google denies the allegations in Paragraph 129.

7

130.

Google denies the allegations in Paragraph 130.

8

131.

Google denies the allegations in Paragraph 131, and respectfully refers the Court

9

to the cited documents for a complete and accurate statement of their contents. Google further

10

avers that many of the alleged “16 steps” occur within the Fortnite app itself.

11

132.

Google denies the allegations in Paragraph 132.

12

133.

Google denies the allegations in Paragraph 133, except admits that in certain

13

instances sideloaded apps do not automatically update in the background on the Android

14

operating system.

15

134.

Google denies the allegations in Paragraph 134, except admits that one or more of16

the defendants offer an Advanced Protection Program, but avers that the Advanced Protection

17

Program is optional and that users can choose whether to enroll in it.

18

135.

Google denies the allegations in Paragraph 135, except admits that users can

19sideload other apps and app stores, that those app stores are subject to the same notifications

20

regarding sideloading, and that Aptoide was flagged as “harmful.”

21

136.

Google denies the allegations in Paragraph 136.

22

137.

Google denies the allegations in Paragraph 137, and respectfully refers the Court

23

to the cited document for a complete and accurate statement of its contents.

24

138.

Google denies the allegations in Paragraph 138.

25

139.

Google denies the allegations in Paragraph 139.

26

140.

Google denies the allegations in Paragraph 140, and respectfully refers the Court

27
28

to the cited documents for a complete and accurate statement of their contents.
- 16 ANSWER AND COUNTERCLAIMS
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1

141.

Google denies the allegations in Paragraph 141.

2

142.

Google denies the allegations in Paragraph 142.

3

143.

Google denies the allegations in Paragraph 143.

4

144.

Google denies the allegations in Paragraph 144.

5

145.

Google denies the allegations in Paragraph 145.

6

146.

Google denies the allegations in Paragraph 146.

7

147.

Google denies the allegations in Paragraph 147.

8

148.

Google admits the allegations in Paragraph 148 except as to the last sentence.

9

Google avers that app developers who sell digital content have available to them a variety of

10

options to process consumers’ purchases.

11

149.

Google denies the allegations in Paragraph 149.

12

150.

Google denies the allegations in Paragraph 150.

13

151.

Google denies the allegations in Paragraph 151.

14

152.

Google admits that one or more of the defendants offer Google Play Billing for the15purchase of digital purchases within mobile and one or more of the defendants offer Google Pay

16

for the purchase of physical products and services within apps.

17
18

153.

Google denies the allegations in Paragraph 153. Google further avers that Epicand other developers benefit from the “freemium” model, which Google Play facilitates.

19

154.

Google denies the allegations in Paragraph 154.

20

155.

Google denies the allegations in Paragraph 155.

21

156.

Google denies the allegations in Paragraph 156.

22

157.

Google denies the allegations in Paragraph 157.

23

158.

Google denies the allegations in Paragraph 158.

24

159.

Google denies the allegations in Paragraph 159, except admits that Google users

25

use Google Play Billing for purchases through Google Play with some exceptions, including

26

purchasing physical goods and purchasing digital content elsewhere that is consumed within the

27

app.

28

- 17 ANSWER AND COUNTERCLAIMS
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1

160.

Google denies the allegations in Paragraph 160.

2

161.

Google denies the allegations in Paragraph 161, and respectfully refers the Court

3
4
5
6

to the cited documents for a complete and accurate statement of their contents.
162.

Google admits the existence of a document containing the quoted language, andrespectfully refers the Court to it for a complete and accurate statement of its contents.
163.

Google denies the allegations in Paragraph 163, except avers that Epic offers a7

payment system for purchases through Epic’s app store. Google respectfully refers the Court to8

the cited documents for a complete and accurate statement of their contents.

9
10

164.

Google admits the allegations in Paragraph 164, except avers that Epic’s reference

to a payment processor is a reference to a payment system.

11

165.

Google denies the allegations in Paragraph 165.

12

166.

Google denies the allegations in Paragraph 166, except admits that Google Play

13

Billing is not used for certain transactions, including for purchasing physical goods.

14

167.

Google denies the allegations in Paragraph 167.

15

168.

Google denies the allegations in Paragraph 168.

16

169.

Google denies the allegations in Paragraph 169.

17

170.

Google denies the allegations in Paragraph 170.

18

171.

Google reasserts and hereby incorporates by reference its responses to each

19

Paragraph of Plaintiff’s Complaint, as though fully set forth herein.

20

172.

Google denies the allegations in Paragraph 172.

21

173.

Google denies the allegations in Paragraph 173.

22

174.

Google denies the allegations in Paragraph 174.

23

175.

Google denies the allegations in Paragraph 175.

24

176.

Google denies the allegations in Paragraph 176, except admits that it engages in

25interstate and foreign commerce.

26

177.

Google denies the allegations in Paragraph 177.

27

178.

Google denies the allegations in Paragraph 178.

28

- 18 ANSWER AND COUNTERCLAIMS
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1
2

179.

Google reasserts and hereby incorporates by reference its responses to eachParagraph of Plaintiff’s Complaint, as though fully set forth herein.

3

180.

Google denies the allegations in Paragraph 180.

4

181.

Google denies the allegations in Paragraph 181, except admits that one or more of5

the defendants have entered into agreements with OEMs.

6

182.

Google denies the allegations in Paragraph 182.

7

183.

Google denies the allegations in Paragraph 183.

8

184.

Google denies the allegations in Paragraph 184.

9

185.

Google denies the allegations in Paragraph 185, except admits that it engages in

10interstate and foreign commerce.

11

186.

Google denies the allegations in Paragraph 186.

12

187.

Google denies the allegations in Paragraph 187.

13

188.

Google reasserts and hereby incorporates by reference its responses to each

14

Paragraph of Plaintiff’s Complaint, as though fully set forth herein.

15

189.

Google denies the allegations in Paragraph 189.

16

190.

Google denies the allegations in Paragraph 190, except admits that developers are

17

generally required to enter into the DDA to distribute apps through Google Play. Google

18

respectfully refers the Court to the cited documents for a complete and accurate statement of their19

contents.

20
21

191.

Google denies the allegations in Paragraph 191, and respectfully refers the Court

to the cited documents for a complete and accurate statement of their contents.

22

192.

Google denies the allegations in Paragraph 192.

23

193.

Google denies the allegations in Paragraph 193, except admits that it engages in

24interstate and foreign commerce.

25

194.

Google denies the allegations in Paragraph 194.

26

195.

Google denies the allegations in Paragraph 195.

27
28

- 19 ANSWER AND COUNTERCLAIMS
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1
2

196.

Google reasserts and hereby incorporates by reference its responses to eachParagraph of Plaintiff’s Complaint, as though fully set forth herein.

3

197.

Google denies the allegations in Paragraph 197.

4

198.

Google denies the allegations in Paragraph 198.

5

199.

Google denies the allegations in Paragraph 199.

6

200.

Google denies the allegations in Paragraph 200.

7

201.

Google denies the allegations in Paragraph 201, except admits that it engages in

8interstate and foreign commerce.

9

202.

Google denies the allegations in Paragraph 202.

10

203.

Google denies the allegations in Paragraph 203.

11

204.

Google reasserts and hereby incorporates by reference its responses to each

12

Paragraph of Plaintiff’s Complaint, as though fully set forth herein.

13

205.

Google denies the allegations in Paragraph 205.

14

206.

Google denies the allegations in Paragraph 206.

15

207.

Google denies the allegations in Paragraph 207, and respectfully refers the Court

16

to the cited documents for a complete and accurate statement of their contents.

17

208.

Google denies the allegations in Paragraph 208.

18

209.

Google denies the allegations in Paragraph 209, except admits that it engages in

19interstate and foreign commerce.

20

210.

Google denies the allegations in Paragraph 210.

21

211.

Google denies the allegations in Paragraph 211.

22

212.

Google reasserts and hereby incorporates by reference its responses to each

23

Paragraph of Plaintiff’s Complaint, as though fully set forth herein.

24

213.

Google denies the allegations in Paragraph 213.

25

214.

Google denies the allegations in Paragraph 214.

26

215.

Google denies the allegations in Paragraph 215.

27

216.

Google denies the allegations in Paragraph 216.

28

- 20 ANSWER AND COUNTERCLAIMS
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1

217.

Google denies the allegations in Paragraph 217.

2

218.

Google denies the allegations in Paragraph 218.

3

219.

Google denies the allegations in Paragraph 219.

4

220.

Google denies the allegations in Paragraph 220.

5

221.

Google denies the allegations in Paragraph 221.

6

222.

Google reasserts and hereby incorporates by reference its responses to each

7

Paragraph of Plaintiff’s Complaint, as though fully set forth herein.

8

223.

Google denies the allegations in Paragraph 223.

9

224.

The allegations in Paragraph 224 are legal conclusions not subject to admission or10

denial. To the extent a response is required, Google denies the allegations in Paragraph 224.

11

225.

Google denies the allegations in Paragraph 225.

12

226.

Google denies the allegations in Paragraph 226.

13

227.

Google denies the allegations in Paragraph 227.

14

228.

Google denies the allegations in Paragraph 228.

15

229.

Google denies the allegations in Paragraph 229.

16

230.

Google denies the allegations in Paragraph 230.

17

231.

Google denies the allegations in Paragraph 231, except admits that Google LLC’s

18

and Google Payment Corp.’s principal place of business is in California.

19

232.

Google denies the allegations in Paragraph 232.

20

233.

Google reasserts and hereby incorporates by reference its responses to each

21

Paragraph of Plaintiff’s Complaint, as though fully set forth herein.

22

234.

Google denies the allegations in Paragraph 234.

23

235.

The allegations in Paragraph 235 are legal conclusions not subject to admission or24

denial. To the extent a response is required, Google denies the allegations in Paragraph 235.

25

236.

Google denies the allegations in Paragraph 236.

26

237.

Google denies the allegations in Paragraph 237.

27
28

- 21 ANSWER AND COUNTERCLAIMS
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1
2

238.

Google denies the allegations in Paragraph 238, and respectfully refers the Court

to the cited document for a complete and accurate statement of its contents.

3

239.

Google denies the allegations in Paragraph 239.

4

240.

Google denies the allegations in Paragraph 240.

5

241.

Google denies the allegations in Paragraph 241.

6

242.

Google denies the allegations in Paragraph 242, except admits that Google LLC’s

7

and Google Payment Corp.’s principal place of business is in California.

8

243.

Google denies the allegations in Paragraph 243.

9

244.

Google reasserts and hereby incorporates by reference its responses to each

10

Paragraph of Plaintiff’s Complaint, as though fully set forth herein.

11

245.

Google denies the allegations in Paragraph 245.

12

246.

The allegations in Paragraph 246 are legal conclusions not subject to admission or

13

denial. To the extent a response is required, Google denies the allegations in Paragraph 246.

14

247.

Google denies the allegations in Paragraph 247.

15

248.

Google denies the allegations in Paragraph 248.

16

249.

Google denies the allegations in Paragraph 249.

17

250.

Google denies the allegations in Paragraph 250, and respectfully refers the Court

18

to the cited document for a complete and accurate statement of its contents.

19

251.

Google denies the allegations in Paragraph 251.

20

252.

Google denies the allegations in Paragraph 252.

21

253.

Google denies the allegations in Paragraph 253.

22

254.

Google denies the allegations in Paragraph 254, except admits that Google LLC’s

23

and Google Payment Corp.’s principal place of business is in California.

24

255.

Google denies the allegations in Paragraph 255.

25

256.

Google reasserts and hereby incorporates by reference its responses to each

26
27
28

Paragraph of Plaintiff’s Complaint, as though fully set forth herein.
257.

Google denies the allegations in Paragraph 257.
- 22 ANSWER AND COUNTERCLAIMS
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1
2
3
4

258.

The allegations in Paragraph 258 are legal conclusions not subject to admission ordenial. To the extent a response is required, Google denies the allegations in Paragraph 258.
259.

The allegations in Paragraph 259 are legal conclusions not subject to admission ordenial. To the extent a response is required, Google denies the allegations in Paragraph 259.

5

260.

Google denies the allegations in Paragraph 260.

6

261.

Google denies the allegations in Paragraph 261.

7

262.

Google denies the allegations in Paragraph 262.

8

263.

Google denies the allegations in Paragraph 263.

9

264.

Google denies the allegations in Paragraph 264.

10

265.

Google denies the allegations in Paragraph 265.

11

266.

Google denies the allegations in Paragraph 266.

12

267.

Google denies the allegations in Paragraph 267.

13

268.

Google denies the allegations in Paragraph 268.

14

269.

Google denies the allegations in Paragraph 269.

15

270.

Google denies the allegations in Paragraph 270, except admits that Google LLC’s

16

and Google Payment Corp.’s principal place of business is in California.

17

271.

Google denies the allegations in Paragraph 271.

18

272.

Google reasserts and hereby incorporates by reference its responses to each

19

Paragraph of Plaintiff’s Complaint, as though fully set forth herein.

20

273.

Google denies the allegations in Paragraph 273.

21

274.

Google denies the allegations in Paragraph 274.

22

275.

Google denies the allegations in Paragraph 275.

23

276.

Google denies the allegations in Paragraph 276.

24

277.

Google denies the allegations in Paragraph 277.

25

278.

Google denies the allegations in Paragraph 278.

26
27
28

- 23 ANSWER AND COUNTERCLAIMS
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Answer to Plaintiff’s Prayer for Relief: To the extent that an answer is required to the2

Prayer for Relief, Google denies the allegations contained therein. Google further states that

3

Plaintiff is not entitled to any remedies sought in the Complaint.

4

AFFIRMATIVE OR ALTERNATIVE DEFENSES

5

In addition to the reasons stated above, Plaintiff is not entitled to relief, and Google is6

entitled to judgment in its favor and against Plaintiff, on the basis of the following Affirmative or

7

Alternative Defenses, pleaded in the alternative to the extent they may be found to be8

inconsistent. Google further states that Epic is not entitled to injunctive relief, including any

9injunctive relief that is worldwide in scope or that would extend beyond Epic. In asserting these10

defenses, Google does not assume the burden of proof on any issue that would otherwise rest on

11

Plaintiff. Further, Google reserves all affirmative defenses under Federal Rule of Civil Procedure

128(c) and any other defenses, at law or in equity, that may now exist or in the future be available

13

based on discovery and further factual investigation in this case.

14First Defense

15(Failure to State a Cause of Action)

16

The Complaint fails to state a claim upon which relief can be granted.

17

Second Defense

18(Legitimate Business Justifications)19

Any and all of Google’s actions alleged by Plaintiff were lawful, justified, procompetitive,20

and carried out in Google’s legitimate business interests and constitute bona fide competitive

21

activity, the benefits of which significantly outweigh any alleged anticompetitive effects.

22

Third Defense

23(Relief Contrary to Public Interest, Inequitable, Impractical, and Unworkable)

24

The relief sought by Plaintiff would be contrary to the public interest, harm consumers,

25

and is otherwise inequitable, impractical, and unworkable.

26
27
28

- 24 ANSWER AND COUNTERCLAIMS
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Fourth Defense

2(International Comity)

3

Plaintiff’s claims are barred, in whole or in part, by the doctrine of international comity,

4

insofar as Plaintiff seeks injunctive relief affecting transactions and conduct occurring outside

5

U.S. jurisdiction.

6

Fifth Defense

7(Failure to Join an Indispensable Party)

8
9

The Complaint fails to join necessary and indispensable parties, including, but not limited
to, consumers and developers of apps distributed for free on Google Play.

10

Sixth Defense

11(Foreign Trade Antitrust Improvements Act)

12

Plaintiff’s claims are barred, in whole or in part, by the Foreign Trade Antitrust

13

Improvements Act, 15 U.S.C. § 6a, insofar as Plaintiff makes claims concerning transactions or

14

alleged conduct involving trade or commerce with foreign nations outside U.S. jurisdiction.

15

Seventh Defense

16(Noerr-Pennington Doctrine)

17

Plaintiff’s causes of action are barred, in whole or in part, by the Noerr-Pennington

18

doctrine.

19

Eighth Defense

20(Unclean Hands)

21
22

Plaintiff’s claims are barred, in whole or in part, by the doctrine of unclean hands for thereasons asserted below in Google’s Counterclaims.

23

Ninth Defense

24(In Pari Delicto)

25
26

Plaintiff’s claims are barred, in whole or in part, by the doctrine of in pari delicto and/or
Plaintiff’s equal involvement in the alleged antitrust violation.

27
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1

Tenth Defense

2(Estoppel)

3

Plaintiff’s claims are barred, in whole or in part, by the doctrine of estoppel.

4

Eleventh Defense

5(Collateral Estoppel)

6

Plaintiff is collaterally estopped based on the Rule 52 Order After Trial on the Merits in7

Epic v. Apple (N.D. Cal. Case No. 4:20-cv-05640-YGR), Dkt. 812, from asserting, among other8

things, an Android App Distribution Market.

9

Twelfth Defense

10(Dormant Commerce Clause)

11

Plaintiffs’ claims are barred in whole or in part by the Dormant Commerce Clause.

12

RESERVATION OF DEFENSES

13

Google reserves the right to assert additional defenses when it determines the particulars

14of Epic’s claims, which are not apparent on the face of the Complaint. Google reserves the right15

to amend this Answer to add, delete, or modify defenses based upon legal theories that may be or16

will be divulged through clarification of Epic’s Complaint, through discovery, or through further

17

legal analysis of Epic’s position in this litigation.

18
19

JURY DEMAND
Google demands a trial by jury on all issues so triable.

20

GOOGLE’S COUNTERCLAIMS IN REPLY

21

Defendants and Counter-plaintiffs Google LLC, Google Ireland Limited, Google

22

Commerce Ltd., and Google Asia Pacific Pte. Ltd., (collectively, “Google”), on personal

23

knowledge as to their own acts, and on information and belief as to all others based on their own

24

and their attorneys’ investigation, allege the following Counterclaims against Plaintiff and

25

Counter-defendant Epic Games, Inc. (“Epic”).

26

Epic, a multibillion dollar company backed by two of the world’s largest video game27

developers, has profited immensely from the safe, secure platform provided by Google Play, a28- 26 ANSWER AND COUNTERCLAIMS
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platform for which it pays a fee equivalent or less than that charged by other major platform

2

providers. Not satisfied with those immense profits, it entered into a legal agreement with Google

3

with which it never intended to comply, deceiving Google and concealing its true intentions to

4

provoke a legal and public relations confrontation that continues to this day. Its actions have put

5

its own users at risk, have harmed Google, and are deserving of relief from this Court.

6

I.

JURISDICTIONAL STATEMENT

7A.

Jurisdiction

8

1.

The Court has subject matter jurisdiction over these claims pursuant to 28 U.S.C.

9§ 1332 based on the diversity of citizenship between Epic and Google. The amount in

10

controversy exceeds $75,000. The Court also has jurisdiction over Google’s counterclaims

11

pursuant to 28 U.S.C. § 1367, because each of Google’s counterclaims arises out of the same

12

factual nucleus as Epic’s claims brought under 15 U.S.C. § 26 and 28 U.S.C. §§ 1331 and 1337.

13

2.

Epic has subjected itself to personal jurisdiction by filing its Complaint in the

14

Northern District of California. In any event, Epic has subjected itself to personal jurisdiction in15

this District because it has engaged in minimum sufficient contacts with this District and has

16

purposefully availed itself of the benefits and protections of both United States and California law

17such that the exercise of jurisdiction over Epic would comport with due process requirements.

18

B.

Venue

19

3.

Venue is proper in this District because Epic brought this action and thereby

20

consented to venue. Alternatively, venue is proper in this District under 28 U.S.C. § 1391(b)21because a substantial part of the events or omissions giving rise to Epic’s claims occurred in this22

District.

23
24
25
26
27
28

II.
4.

THE PARTIES

Google LLC is a limited liability company organized and existing under the lawsof the State of Delaware, and has its principal place of business in Mountain View, California.
5.

Google Ireland Limited is a company incorporated in Ireland with its principal

place of business in Dublin, Ireland.
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1
2
3
4
5
6

6.

Google Commerce Ltd. is a company incorporated in Ireland with its principal

place of business in Dublin, Ireland.
7.

Google Asia Pacific Pte. Ltd. is a company incorporated in Singapore with its

principal place of business in Mapletree Business City, Singapore.
8.

Epic Games, Inc. is a Maryland corporation with its principal place of business in

Cary, North Carolina.

7

III.

BACKGROUND

8

A.

Android App Distribution and Google Play99.

Started in a Silicon Valley garage in 1998, Google is one of the most innovative10

technology companies on the planet. In 2008, Google introduced the open-source Android

11

operating system. To this day, Google licenses Android for free.

12
13
14

10.

Google also operates Google Play, an online store where people go to find andenjoy their favorite apps, games, movies, TV shows, books, and more on their Android devices.
11.

Google Play is not the only Android app store—developers and users enjoy a wide15

array of options for distributing, downloading, and installing apps on Android devices, including

16

third-party app stores, direct downloads, and web apps—but many developers and users prefer17

Google Play because of its discoverability features, wide selection, and security and privacy

18

protections.

19

12.

For a developer to distribute apps through Google Play, it must enter into the20

Google Play Developer Distribution Agreement (the “DDA”), which is a “legally binding

21

contract between [a developer] and Google in relation to [that developer’s] use of Google Play to22

distribute [that developer’s] Product.” DDA § 2.1. The DDA also incorporates Google’s

23

Developer Program Policies. See DDA § 4.1.

24

13.

The DDA “covers both Products that users can access for free and Products that25

users pay a fee to access.” DDA § 3.2. Under the DDA, Google does not collect a service fee

26

unless a developer chooses to monetize an app distributed on Google Play—and even then only if

27

the developer charges for downloads, in-app purchases, or subscriptions. As the DDA states,28- 28 ANSWER AND COUNTERCLAIMS
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1“You may also choose to make Products available for free. If the Product is free, You will not be2charged a Service Fee.” DDA § 3.7. Approximately 97% of apps available on Google Play are3

free, meaning that Google does not collect any service fee on those apps. In other words, Google

4

Play allows developers of free apps to reach a worldwide audience of billions, all without having

5

to pay Google a penny (other than a nominal, one-time fee of $25 to set up a Google Play6

developer account).

7

14.

Under the DDA, developers who choose to monetize apps distributed through8

Google Play are not required to choose any particular monetization strategy. They have a variety

9of monetization options at their disposal, including paid distribution (i.e., charging a price to10

download the app), sale of in-app products, subscriptions, and advertisements.

11

15.

When a developer chooses to charge for app downloads, in-app purchases, or

12

subscriptions for content distributed on Google Play, Google charges a service fee of up to 30%

13of the price charged by the developer. At present, the vast majority of developers are eligible for14

a reduced service fee of 15% or less. What this means is that, under the DDA, Google is paid for15

the extensive services it provides developers and the sizable investment it makes in Google Play’s

16

tools, software, and technology, only if and when a user pays for an app, in-app product, or

17

subscription.

18

16.

Google Play’s Payment Policy (which is incorporated into Section 4.1 of the

19DDA) provides that when a developer charges for downloads, certain in-app purchases, or

20

subscriptions in apps distributed on Google Play, the developer must use Google Play Billing.

21

Relatedly, apps distributed through Google Play “may not lead users to a payment method other22

than Google Play’s billing system.” Google Play’s Payment Policy ¶ 3.

23

17.

The DDA also provides that developers may “not use Google Play to distribute or

24

make available any Product that has a purpose that facilitates the distribution of software

25

applications and games for use on Android devices outside of Google Play.” DDA § 4.5. What26

this means is that a developer cannot use Google Play to distribute apps that, in turn, facilitate the27

download of other apps.

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18.

Under the DDA and its incorporated policies, developers must also submit their2apps and app updates to Google for review and approval before that content is made available on

3

Google Play. To be approved, an app must comply with Google’s Restricted Content, Malware,4

and Mobile Unwanted Software policies. Complying with these policies ensures the safety and5integrity of Android and provides valuable security screening and safeguards to protect the user

6

experience.

7

19.

Developers who sign the DDA agree to “use Google Play only for purposes that8

are permitted by this Agreement and any applicable law, regulation, or generally accepted9practices or guidelines in the relevant jurisdictions (including any laws regarding the export of10

data or software to and from the United States or other relevant countries).” DDA § 4.6. The

11

DDA grants Google the right to “reject, remove, suspend, limit the visibility of a Product on

12

Google Play” if “a Product or any portion thereof . . . violates this Agreement, applicable policies,

13

or other terms of service.” DDA §§ 8.3, 10.3.

14

20.

Of course, a developer does not have to agree to the DDA to distribute an app on

15

Android. The DDA only applies to apps distributed on Google Play. See DDA § 2.1. Neither the

16

DDA, nor Google’s policies, nor Android itself precludes developers from distributing Android

17

apps through competing app stores, direct distribution from a website, or otherwise. Google does18

not collect service fees from apps distributed through these competing channels. And Google

19

collects no service fees when developers use the tools provided to them for free by Google to20

develop their apps that in turn are distributed on stores that compete with Google Play.

21

B.

Epic Games, Inc.

22

21.

Epic is a video game developer that was recently valued at $28.7 billion. It was

23

founded in 1991 by Tim Sweeney, Epic’s controlling shareholder, CEO, and chairman of the24board of directors. Epic has several powerful gaming-industry shareholders, including Tencent

25

Holdings, Ltd., a Chinese video game company, and Sony Corporation, a gaming console

26

company.

27
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1

22.

With respect to Epic’s primary business of app development, Epic’s flagship video

2

game product is Fortnite. Fortnite uses the “freemium” business model, under which a game is3

free to download and play, but is monetized through in-app purchases or through purchases

4

directly from Epic’s website. Fortnite has over 400 million registered players worldwide and5features “cross-play,” which allows players of different platforms (like Sony’s and Microsoft’s) to

6play with one another. In connection with this cross-play capability, Epic agreed to pay the same

7

30% commission rate across most platforms. In fact, with respect to Sony, in particular, Epic has

8agreed to extra payments above and beyond the standard 30% commission rate.

923.

In addition to gaming software development, Epic also licenses two products to10other developers: Unreal Engine and Epic Online Services. Unreal Engine is a software suite

11

used by developers to create three-dimensional and other immersive digital content. In order to

12protect Epic’s intellectual property rights, Epic’s subsidiary licenses the Unreal Engine software13

to developers.

14

24.

Epic has reaped economic benefit from its relationship with Google and all of the15

services that Google provided to Epic. For virtually no cost to it, but at a cost to Google, Epic

16

received benefits from Google’s services and technology which allowed Epic to bring its games,

17

including Fortnite, to Android devices and to market and distribute its games through Google

18

Play to tens of millions of customers.

19
20

25.

Epic first began distributing Fortnite on the Google Play Store in April 2020. As acondition for distributing Fortnite on Google Play, Epic entered into the DDA with Google.

21
22
23

26.

Under the DDA, Epic agreed that it would pay Google a “Service Fee” on certain

24

in-app products sold through Fortnite and any other Epic apps distributed on Google Play. See

25

DDA § 3.4; Play Console Help, “Service Fees.” As Epic well knows, developers can choose how

26

to monetize their apps, and Epic chose to use the “freemium” model for Fortnite. This27

“freemium” business model—which depends on free distribution services like those offered by28- 31 ANSWER AND COUNTERCLAIMS
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1

Google Play—has been tremendously lucrative to many developers, including Epic. Epic did not

2

pay Google anything for the millions of times Android users downloaded Fortnite from Google

3

Play. Google collected a service fee only if and when Fortnite players bought in-app content in4

the version of Fortnite downloaded from Google Play.

5

27.

As Epic knows, it did not have to agree to the DDA to distribute an app on

6

Android. The DDA only applies to apps distributed on Google Play. See DDA § 2.1. Neither the

7

DDA, nor Google’s policies, nor Android itself precluded Epic from distributing Fortnite through8

competing app stores, direct distribution from a website, or otherwise.

928.

Epic benefited from these alternative distribution options. In fact, when Epic first10

launched the Android version of Fortnite in August 2018, it did not rely on Google Play. Epic

11

instead launched Fortnite through Samsung’s Galaxy Store and as a direct download from Epic’s

12website. As Epic boasted in a blog post that Epic has since deleted, “[i]n the first 21 days since13

the Fortnite’s launch on Android, interest has been extremely high, with over 23 million players

14entering our Android beta and over 15 million players installing our APK.”

15
16

29.

But launching outside of Google Play ended up putting Epic’s own users at risk,

because of the need to enable the ability to install from “unknown sources.”

17
18
19
20

Sure enough, when Epic first made21

its Android version of Fortnite available for download, the app included an “extremely serious

22

security flaw in the first Fortnite installer for Android that could allow other apps installed on the23

targeted devices to manipulate installation process and load malware.” It was Google that24

identified the security flaw

25
26
27
28

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In addition, when Epic first launched Fortnite outside of Google Play through sideloading,2

it also included a pop-up warning for “Application Installation Safety,” telling users that “Your3

browser required special permissions to install the Fortnite Installer. To make your device as

4

secure as possible, tap here to start disabling these permissions now.”

530.

Epic also benefited from the fact that Google’s DDA permits users to purchase6

digital content outside of an app and then consume that content within an app downloaded from

7

Google Play. When that happens, Google does not collect any service fee on those transactions.

8

Fortnite players could purchase “V-Bucks,” the digital currency that is used to obtain items

9

within the app, from a variety of sources, including (1) on other game platforms such as

10

Microsoft’s Xbox or Apple’s iPhone, each of which charged a 30% service fee; (2) online

11

through Epic’s website or retail sources such as Amazon.com; or (3) through gift cards sold in

12

traditional retail outlets. Fortnite players could then spend those V-Bucks on digital content in

13

the Android Fortnite app, and Google did not receive anything from Epic or users for these14transactions.

15

31.

Epic did not have to agree to the DDA, but it did so with full knowledge of the16

agreement’s terms. Despite taking advantage of Google’s development tools, the alternate app

17

distribution and sales channels that Android facilitates, and Google Play’s free distribution

18

services—all with no payment to Google—Epic schemed willfully to violate the terms of the19

DDA to avoid paying Google anything at all on the fraction of transactions that would be subject

20

to Google’s service fee.

21

C.

Epic Sets the Stage for Its Intentional Breach

22

32.

After lackluster sales in early 2019, Epic began planning its intentional breach of23

the terms of the DDA in order to “draw Google into a legal battle over anti-trust” and “get[]24

around [Google’s] 30% revshare cut” as part of a campaign internally known as “Project25

Liberty.” Project Liberty was a highly choreographed attack on Apple and Google with two

26

purposes: (1) Epic sought a systematic change which would result in tremendous monetary gain27
28

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and wealth, and (2) Epic sought to challenge the policies and practices of Apple and Google2

which are an impediment to Mr. Sweeney’s vision of an oncoming metaverse.

333.

Internally, Epic also hoped to revive and reinvigorate Fortnite by pivoting its

4business whereby player-developers could create new content and Epic could share a majority of5

profit with those creators. Although Epic had initially launched Fortnite on Android outside of6

Google Play, Epic decided that “once we are ready to submit, Epic will announce publicly that we7

are going to Google Play.” But Epic had no intention of actually complying with its agreement

8with Google and paying Google its service fee, as provided for under DDA § 3.4. According to9

Epic’s own documents, the plan was simple: “[i]f we are rejected for only offering Epic’s

10

payment solution. The battle begins. It’s going to be fun!”

11
12

34.

The plan for Project Liberty originated in late 2019 and planning began in earnest

in the first quarter of 2020.

13
14
15
16
17

35.

Epic submitted Fortnite to Google Play using Epic’s own direct payment system18

and without Google Play Billing, but the submission was rejected for, among other things, failure

19

to comply with the Google Play Billing Policy.

20

D.

Epic’s Breach of Its Contractual Obligations

21

36.

In April 2020, Epic eventually submitted a compliant version of Fortnite to22

Google Play. In connection with the Fortnite launch, Google provided Epic with valuable23

support throughout the process. Indeed, Google was actively engaged in the partnership with

24

Epic, supplying Epic with data analytics and reporting tools as well as technology support

25

throughout the launch.

26
27
28

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1
2
3

37.

But Epic’s purported launch on Google Play was an act of deception designed to

4

provoke litigation—Epic had been working for months on a way to conceal Epic’s payment5

system in an update on both Google Play and the Apple App Store. This undetected update

6

would be accomplished through a “hotfix,” a method of app updating without Google’s

7knowledge that would allow the Fortnite app to import data directly from the Epic server. As Mr.

8

Sweeney described in his Epic v. Apple trial testimony, the hotfix was a server side configuration

9

change which enabled Epic’s direct payment system to become available without submitting a

10

new version through the app review process. This hotfix was designed for the sole purpose of

11

allowing users to bypass Google Play Billing in violation of the DDA. By May 11, 2020, the key

12components of Epic’s strategy were in place: “We submit a build to Google and Apple with the13ability to hotfix on our payment method . . . . We flip the switch when we know we can get by

14

without having to update the client for 3 weeks or so.”

15

38.

Project Liberty required extensive planning and testing. Specialized engineers and16

an in-house information security team attempted to hack the code to ensure that Google (and17Apple) could not “reveal the intent” of the hotfix when it was submitted. Epic also used analytics

18

to determine the number of players that would receive the hotfix once triggered.

19

39.

Recognizing that “Epic is not sympathetic,” Epic also began planning a20

coordinated public relations campaign to help with its image in the wake of the hotfix update.

21

Epic implemented its plan throughout the summer of 2020 by creating the Coalition for App

22

Fairness (the “Coalition”), and charged it with generating continuous media and campaign tactic

23

pressure on Google and Apple. Epic hired a consultant to help establish a reason for the Coalition24

to exist (either organic or manufactured) and then concealed the Coalition’s existence until after

25

the hotfix was triggered. In fact, Epic had retained a public relations firm to further this scheme

26

by getting players, media, and industry on Epic’s side and by creating a narrative that Epic is27

benevolent.

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1

40.

2

industry;

Epic was not concerned about foreclosure or Google’s agreements or the gaming

3
4
5
6
7
8
9
10
11
12
13
14

41.

In a July 27, 2020 presentation to Epic’s Board of Directors, Epic outlined its plan

to implement the hotfix and its aggressive and sustained legal and media campaign.
42.

On August 5, 2020, Epic’s Tim Sweeney emailed Microsoft to announce that

15

“Epic has certain plans for August . . . ,” and later noted that Microsoft would “enjoy the16

upcoming fireworks show.” Mr. Sweeney conceded during his trial testimony in Epic v. Apple

17

that these emails were referring to Epic’s launch of Project Liberty.

18
19

43.

On August 13, 2020, Epic finally did “flip the switch,” launching its scheme tobreach the DDA with Google and avoid paying Google a service fee.

20
21
22
23
24
25
26
27
28

44.

Once the hotfix was launched later that day, the Fortnite app offered both Google

Play Billing and Epic’s direct payment system as payment options. This unapproved version of- 36 ANSWER AND COUNTERCLAIMS
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Fortnite allowed Epic to offer its users a way to pay Epic directly, while bypassing Google Play

2

Billing. Epic knew that this violated the DDA: Epic assumed its breach would result in the3

removal of Fortnite from the iOS and Android platforms. In fact, Mark Rein, Epic’s co-founder,

4

predicted “there’s a better than 50% chance Apple and Google will immediately remove the5games from their stores the minute we do this,” and Daniel Vogel, the Chief Operating Officer,

6

predicted “Google and Apple will immediately pull the build for new players.”

7

45.

Epic willfully breached the DDA by submitting a version of Fortnite for8

publication on Google Play with a payment method other than Google Play Billing for purchases

9of in-app content. By doing this, Epic denied Google its service fee under the DDA for any

10purchases made through the app outside of Google Play Billing.

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

E.

Fortnite Is Removed From Google Play, But Millions of Android Users
Continue to Have Access to the App

46.

On the same day Epic launched the hotfix and breached the DDA, Google notified

Epic that Fortnite was in violation of the DDA, Google’s Malicious Behavior Policy, and theGoogle Play Billing Policy, and removed the Fortnite app from Google Play. Google did notdisable Epic’s developer account and indicated that Epic could publish a new, compliant versionof Fortnite.
47.

Android Fortnite players who downloaded the app from Google Play continued tohave access to the app and to any available in-app purchase products on their devices, even after
Google removed Fortnite from Google Play.
48.

The users that downloaded the non-compliant version of Fortnite before its

removal from Google Play are still able to use Epic’s hotfixed external payment mechanism tomake in-app purchases—allowing Epic to evade its contractually agreed service fee to Google forthose purchases.
F.

Epic’s Public Campaign Against Google

49.

Epic sued Google on the same day that it launched its external payment system inviolation of the DDA, immediately after Google removed Fortnite from Google Play. Epic alsobegan a campaign to combat negative consumer reactions that Epic knew were coming because of- 37 ANSWER AND COUNTERCLAIMS
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its conduct. For example, Epic knew that users would rightly see Epic as acting out of greed, so

2

Epic told users “[w]hen you choose to use Epic direct payments, you save up to 20% as Epic

3

passes along payment processing savings to you.” Epic further told consumers that if Google

4

dropped its service fee, Epic would pass on those cost reductions to users. These statements were5

intended to villainize and harm Google, while distracting from Epic’s breach.

6

IV.

CLAIMS AND PRAYER FOR RELIEF

7

COUNT I

8

Breach of Contract

9
10
11
12

50.

Google realleges and incorporates by reference each of the allegations set forth51.

Epic entered into express and/or implied contracts with Google, including theabove.

DDA. The DDA is a valid and enforceable contract.

13

52.

Google performed all of its obligations under the DDA.

14

53.

The DDA, among other things, expressly required that Epic use Google Play

15

Billing for in-app purchases in apps downloaded through Google Play and that Google be paid a

16

service fee on such in-app purchases. DDA §§ 3.4, 4.1. Google Play’s Billing Policy required

17

that apps distributed through Google Play “may not lead users to a payment method other than

18

Google Play’s billing system.”

19

54.

Epic breached these provisions of the DDA on August 13, 2020 by activating its

20

own external payment system through a hotfix in Fortnite designed to bypass Google Play

21

Billing. By sidestepping the contractual provisions relating to Google Play’s billing system and22

by failing to pay Google’s agreed-to service fees on its in-app sales through Fortnite, Epic

23

breached the DDA §§ 3.4, 4.1, and Google Play’s Payments Policy.

24

55.

The DDA also requires that Epic not “misrepresent or conceal its primary25

purpose” and that Epic “use Google Play only for purposes that are permitted by this Agreement

26

and any applicable law, regulation, or generally accepted practices or guidelines in the relevant

27
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jurisdictions (including any laws regarding the export of data or software to and from the United

2States or other relevant countries).” DDA § 4.6; Misrepresentation Policy.

3
4

56.

Epic also breached the DDA and its incorporated policies by concealing from

Google its changes to the Fortnite app.

557.

As a direct result of Epic’s breach of contract, Google has suffered injury,

6

including the loss of the DDA’s “service fee” on a global basis, and the Google Play ecosystem7

has suffered injury because the hotfix potentially exposed a security vulnerability that could be

8

exploited for even more nefarious purposes.

958.

Epic’s breaches of its contractual obligations are ongoing. Users who downloaded10

the version of Fortnite containing Epic’s hotfix can still make in-app purchases using Epic’s own

11external payment system.

12
13

59.

Epic’s breaches of its contractual obligations also threaten Google’s reputation andgoodwill with its users.

14

COUNT II

15

Breach of Implied Covenant of Good Faith and Fair Dealing

16

60.

Google realleges and incorporates by reference each of the allegations set forth

18

61.

Epic entered into valid contracts with Google, including the DDA.

19

62.

The DDA and incorporated policies prohibit Epic from making sales to users

17

20
21

above.

outside of Google Play Billing in order to avoid Google’s service fee.
63.

Not only did Epic’s actions, which were undertaken in bad faith, breach the22express terms of the DDA, but Epic also frustrated Google’s rights under the DDA, including by

23

publishing the hotfix to avoid Google’s contractually agreed-upon service fees, and by otherwise

24

undermining Google’s ability to operate Google Play.

25
26

64.

As a direct result of Epic’s breach of its covenant of good faith and fair dealing,

Google has suffered damages on a global basis, including the loss of the DDA’s service fee.

27
28

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1

COUNT III2

Quasi-Contract / Unjust Enrichment

3
4

65.

Google realleges and incorporates by reference each of the allegations set forth66.

Epic has alternatively been unjustly enriched at Google’s expense through theabove.

5
6

conduct described in the preceding paragraphs, including by diverting to itself through the hotfix

7

service fees that Google was entitled to as compensation under the DDA for app distribution, and8other services provided to Epic.

9
10

67.

compensating Google.

11
12

Epic has unjustly retained these benefits, and continues to do so, without

68.

Google seeks restitution of any such amounts by which Epic has been unjustly

enriched at Google’s expense.

13

COUNT IV

14

Declaratory Judgment

15
16
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69.

Google realleges and incorporates by reference each of the allegations set forth

70.

There is an actual, substantial, continuing, and justiciable controversy between

above.

Google and Epic regarding their respective rights under the DDA.
71.

Google has the right to terminate Epic as a registered Google Developer and to

remove an app from Google Play.
72.

In light of Epic’s breach of its contractual obligations

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Google made clearthat Epic could not distribute Fortnite on Google Play if Epic did not cure its breaches.
73.

Google therefore has standing to seek declaratory judgment of its rights under its

contracts with Epic, including the DDA.
74.

Google seeks and is entitled to a declaratory judgment that: (a) the DDA is a valid,

lawful, and enforceable contract; (b) Epic breached that agreement; and (c) Google has the- 40 ANSWER AND COUNTERCLAIMS
Case Nos. 3:20-cv-05671-JD; 3:21-md-02981-JD

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contractual right under the DDA to remove Fortnite from Google Play and terminate Epic as a2

registered Google Developer due to its breach.

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V.
75.

JURY DEMAND

Google demands a trial by jury on all issues so triable.

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VI.

PRAYER

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Wherefore, Counterclaimant Google respectfully requests that the Court:

7A.

Decree that Epic is liable for breach of its contractual obligations under the DDA;

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B.

Decree that Epic is liable for breach of its implied covenant of good faith and fair9

dealing;

10C.

Decree that Epic was unjustly enriched;

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D.

Award Google compensatory damages, punitive damages, attorney’s fees, and1213interest;
E.

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Award restitution and disgorgement of all earnings, profits, compensation,
benefits, and other ill-gotten gains obtained by Epic as a result of its conduct;

F.

Enter a permanent injunction enjoining Epic, and all persons and entities in active

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concert or participation with Epic, from facilitating, assisting, or participating in

17(a) the continued operation of Epic’s unauthorized external payment mechanism in

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its apps, including Fortnite; (b) the introduction of any further unauthorized

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external payment mechanisms into any apps, including Fortnite, on Google Play;20

and (c) the removal of Epic’s payment system as an available payment mechanism

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for in-app purchases through any Google Play apps, including Fortnite;

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G.

Award such other and further relief as the Court deems just and proper.

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- 41 ANSWER AND COUNTERCLAIMS
Case Nos. 3:20-cv-05671-JD; 3:21-md-02981-JD

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Respectfully submitted,

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Dated: October 11, 2021

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O’MELVENY & MYERS LLPIan Simmons (pro hac vice 1)
Daniel M. Petrocelli
Benjamin G. Bradshaw
Stephen J. McIntyre

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By:

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/s/ Ian Simmons__________
Ian Simmons

MORGAN, LEWIS & BOCKIUS LLP
Brian C. Rocca
Richard S. Taffet
Sujal J. ShahMichelle Park Chiu
Minna Lo Naranjo
Rishi P. Satia
By:/s/ Brian C. Rocca_________
Brian C. Rocca

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MUNGER, TOLLES & OLSON LLP
Glenn D. Pomerantz
Kuruvilla Olasa
Kyle W. Mach
Justin P. Raphael
Emily C. Curran-Huberty
Jonathan I. Kravis
Marianna Y. Mao
By:/s/ Glenn D. Pomerantz
Glenn D. Pomerantz

Counsel for Defendants and Counter-plaintiffs

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__

1 Pro hac vice pending in Case No. 3:21-md-02981-JD.

- 42 ANSWER AND COUNTERCLAIMS
Case Nos. 3:20-cv-05671-JD; 3:21-md-02981-JD

Case 3:20-cv-05671-JD Document 182 Filed 10/11/21 Page 43 of 43***REDACTED VERSION OF DOCUMENT SOUGHT TO BE SEALED***ECF ATTESTATION1
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I hereby attest that concurrence in the filing of this document has been obtained from eachof the other signatories hereto.

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Dated: October 11, 2021

By:/s/ Ian Simmons__________
Ian Simmons

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- 43 ANSWER AND COUNTERCLAIMS
Case Nos. 3:20-cv-05671-JD; 3:21-md-02981-JD