A significant shift is underway in the mobile app landscape as a US judge has mandated Alphabet’s Google to revamp its app business, enhancing options for Android users. This ruling follows a jury verdict favoring Epic Games, the creator of Fortnite, which accused Google of monopolistic practices. The injunction, issued by US District Judge James Donato in San Francisco, outlines a series of changes aimed at fostering competition within Google’s lucrative Play Store.
Key Changes Required by the Court
Judge Donato’s order specifies that Google must implement several critical adjustments over the next three years:
- Prohibition of restricting in-app payment methods, allowing users to choose how they pay for transactions.
- Permission for users to download competing third-party Android app platforms or stores.
- Restriction on payments to device manufacturers for preinstalling its app store.
- Limitation on revenue-sharing practices with other app distributors.
In a notable move towards transparency and compliance, the judge has instructed Epic and Google to form a three-person technical committee responsible for overseeing the implementation of these changes. Each party will appoint one member, who will then select a third member to ensure impartiality.
Following the ruling, Alphabet’s shares experienced a decline of 2.2%. Google has expressed its intention to appeal the decision, potentially seeking a pause on the injunction from the Ninth US Circuit Court of Appeals while the appeal is underway. The injunction is set to take effect on November 1, allowing Google time to align its practices with the court’s directives.
The lawsuit initiated by Epic Games in 2020 highlighted concerns over Google’s control over app distribution and payment processes on Android devices. The jury’s December 2023 verdict confirmed that Google had unlawfully suppressed competition, leading to Judge Donato’s recent injunction.
Despite Google’s arguments against the proposed reforms—claiming they could be costly and detrimental to consumer privacy—the judge largely dismissed these concerns during an August hearing. He emphasized the necessity for Google to rectify its monopolistic practices, stating, “You’re going to end up paying something to make the world right after having been found to be a monopolist.”
In a broader context, Google is also facing scrutiny in a separate antitrust case, where US District Judge Amit Mehta ruled against the company for illegally monopolizing web search, further complicating its legal landscape. Additionally, a trial is currently underway in Virginia regarding Google’s dominance in advertising technology, with the company denying all allegations across these various cases.
