Google must open up its Android app store to competition from smaller rivals like “Fortnite” maker Epic Games, a federal judge said Monday in a bombshell ruling that could topple the company’s dominance over the app market.
The sweeping remedies outlined by US District Judge James Donato in San Francisco federal court came months after North Carolina-based Epic Games won a stunning verdict against Google. Last December, a jury found that Google operated illegal monopolies through the Play Store and its closely linked Android in-app billing system.
“You’re going to end up paying something to make the world right after having been found to be a monopolist,” Donato told Google’s lawyers in court.
For the next three years, Google will be barred from preventing app developers from using their own in-app payment systems or from directing users to download apps from sources outside its lucrative “Play Store” for Android apps, according to Donato’s order.
Additionally, Google will be blocked from paying specific app developers to exclusively use its Play store for distribution and barred from sharing revenue generated by its Play Store with other app store operators.
Shares of Google parent Alphabet sank more than 2% in trading Monday.
Google said it would ask the court to pause the judge’s changes pending the outcome of its ongoing appeal of the jury’s verdict.
“Ultimately, while these changes presumably satisfy Epic, they will cause a range of unintended consequences that will harm American consumers, developers and device makers,” Google said in a blog post.
Epic Games did not immediately return a request for comment on the judge’s decision.
Google will also be required to provide rival developers with access to its back catalog of apps. It can’t offer deals to smart device makers or carriers to preinstall the Play Store.
The preliminary injunction is slated to take effect on Nov. 1 and run through the same date in 2027.
Donato said Google will be permitted to take “reasonable measures” to ensure security. Google had argued that any bid to force open its app store would place user privacy and devices at risk.
The judge ordered the creation of a three-person committee to oversaw compliance of his order, with Epic and Google each appointing one member and those two selections choosing a third member.
Epic Games and other critics have alleged for years that Google has a stranglehold over the app marketplace, where it has traditionally pocketed commissions of up to 30% on digital transactions made within the Play Store.
During the trial, Epic’s legal team had focused on Google’s practice of making payments and striking deals with developers to stifle competition against the Play Store. Lawyers referred to the practice – known internally as “Project Hug” – as a “bribe and block” scheme.
In one such case, Google provided $360 million in incentives to “Call of Duty” maker Activision Blizzard” so that it would launch its games on the Play Store.
The judge’s ruling is just the latest sign of an escalating legal and regulatory crackdown against Google.
In August, US District Judge Amit Mehta determined that Google has an illegal monopoly over the online search market. He is expected to decide on appropriate penalties by next summer.
Separately, Google is facing off against the Justice Department in a separate federal antitrust case aimed at its alleged monopoly over digital advertising technology.
In both cases, the feds are likely to pursue a forced breakup of Google’s empire.
With Post wires
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