Google Countersues Epic for Breach of Contract, Security Implications

By M. Kang

Posted on October 14, 2021

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Google has countersued Epic, claiming Epic Games’ breach of contract caused Google loss of revenue and caused potential security issues because of their conduct.

As reported by VGC, Google launched a counter-litigation against Epic.

Epic, it claims, engaged in a highly-coordinated effort to undermine Apple and Google practices, agreeing to store front policies in “an act of deception designed to provoke litigation.”

Internally titled “Project Liberty,” Epic released Fortnite on both Google Play and the App Store with a concealed “hotfix” ready to add direct-to-Epic payment, circumventing both stores’ payment fees. This action also “potentially exposed a security vulnerability that could be exploited for even more nefarious purposes.”

By circumventing the store fees, Epic willingly breached its contract with Google. Not only that, a clause in the contract stated that Epic must not “misrepresent or conceal its primary purpose… [and] use Google Play only for purposes that are permitted by this Agreement and any applicable law, regulation, or generally accepted practices or guidelines in the relevant jurisdictions (including any laws regarding the export of data or software to and from the United States or other relevant countries).” Coordinating the hotfixes in order to bring litigation breached this “covenant of good faith and fair dealing” portion of the contract.

Court Rules Apple Must Allow Alternative Payment in Epic Games v. Apple

Google swiftly took down Fortnite from Google Play after it was clear that Epic would not comply with the contractual agreements. However, players who downloaded the update before the game was taken down still have access to the game and direct payment options. Thus, Google claims “Epic has alternatively been unjustly enriched at Google’s expense…. [and] has unjustly retained these benefits, and continues to do so, without compensating Google.”

There could be precedent for Google to win its counterclaim. Recently, a court ruled on Epic Games v. Apple claiming Apple was entitled to over $12 million in revenue Epic Games collected because of its similarly contract-breaking direct payment option on iOS Fortnite.

Apple Appeals Ruling in Epic Games Lawsuit

Epic did win one count of 10 in that court case with Judge Yvonne Gonzalez Rogers ruling Apple must allow companies to promote alternative payment methods which would be housed outside of an app. Epic CEO Tim Sweeney has stated that that is not a win and has appealed the ruling. Apple has also appealed the same ruling, arguing that adding links and buttons to external payment methods could be fraught with risk and that the December implementation timing is not enough time to test the security of this process.

Litigation between Epic, Apple, and Google will likely continue for quite a while with this process of ruling, appeals, and countersuing.

To read the full lawsuit, see here.