Recently, U.S. Judge James Donato made a final ruling in Epic's lawsuit against Google (GOOG.US, GOOGL.US), determining that Google's Android app store engaged in illegal monopolistic practices and ordered Google to open the Google Play app store to competitors within three years after the judgment takes effect.
According to the ruling, Google must distribute third-party app stores of competitors within the Google Play app store and allow these third-party app stores to access the full app catalog of Google Play, unless developers choose to opt out. This was one of the main demands proposed by Epic, but not the only victory Epic achieved today.
From November 1, 2024, to November 1, 2027, Google must also: cease mandating that apps within the Google Play store use Google's payment system (the jury determined that Google illegally bundled its payment system with its app store); allow Android developers to introduce other payment methods to users; allow Android developers to provide app download links outside the Play Store; and allow Android developers to freely set app prices without restrictions from the Play Billing system.
At the same time, Google cannot: share app revenue with any individuals or entities currently launching or planning to launch an app store; provide funding or incentives to developers to exclusively or preferentially release apps in the Play Store; prevent developers from releasing apps in competitor stores by providing funding or incentives; or offer funding or benefits to device manufacturers or operators to encourage them to preinstall the Play Store or not preinstall competitor app stores.
Nevertheless, Google will retain some control over the security and security issues of the Google Play store. The ruling stipulates that Google can take reasonable measures to manage these issues, but these measures must be "strictly necessary and targeted" and comparable to the way Google currently manages the Google Play store. Google can also charge fees for these management measures. Epic has repeatedly argued that Google should not hinder the normal operation of third-party app stores through management.
Judge Donato gave Google eight months to establish a system, with a three-person technical committee chosen jointly by Epic and Google to review any disputes.
However, Epic did not win all its demands. It had hoped that the judge would extend the opening period of Google Play from three years to six years, also wanted users to be able to easily sideload apps with a simple tap, and demanded that Google stop bundling Android APIs with Google Play.
Donato explained why not extending to six years: "These provisions are designed to provide competitors with a fair competitive environment without imposing an excessive burden on Google. As competition enters, the unfair advantage Google Play gains through network effects will also diminish, and Google as a competitor should not be overly restricted."
Epic Games first filed a lawsuit against Google on August 13, 2020, the same day it also sued Apple (AAPL.US). The well-known game developer tried to bypass the 30% in-app purchase share fees charged by Google and Apple in its popular game Fortnite through a carefully planned action. The two tech giants quickly retaliated by removing Fortnite from their platforms, which led to the #FreeFortnite movement and two lawsuits for illegal monopolization.
The Apple case has ended, with Apple essentially winning the lawsuit. The Supreme Court dismissed Epic's final appeal in January of this year. The only legal victory Epic achieved was overturning Apple's "reverseċrule," theoretically allowing developers to freely inform users how to bypass Apple's payment system.In comparison, the Google case took longer to adjudicate and resulted in significantly different outcomes. Epic repeatedly demonstrated that Google has treated developers unfairly and intentionally concealed facts. In December last year, a jury unanimously ruled that the Google Play Store and Google Play Billing Services constituted illegal monopolistic practices, and Google's numerous special deals with game developers and mobile phone manufacturers were anti-competitive actions.
In August of this year, Judge Donato warned Google that it would pay a price for its actions. During the remedial hearing, he stated, "We will dismantle these barriers; it is an inevitable outcome." He refuted Google's defenses, arguing that meeting Epic's demands would not take too much time or money.
It is currently unclear whether Google must immediately comply with the court's demands. Google has already indicated that it will appeal the decision, and similar to Apple, Google may request that the appellate court suspend the execution of Judge Donato's order, continuing to delay enforcement through legal means.
Last week, Epic filed a second lawsuit against Google and Samsung, alleging that the two companies are attempting to evade the upcoming ban by increasing the operational complexity of third-party app stores. This case is related to the current one and will also be presided over by Judge Donato.
As of Monday's closing, Google's stock fell by 2.47%, trading at $164.39.