On Monday, October 7, a U.S. court issued a permanent injunction forcing Google to
to soften its attitude towards alternative Android app stores. Google is prohibited from engaging in anticompetitive practices that favor Google Play.
The court’s decision restricts Google from making payments or non-competitive revenue sharing in favor of companies in exchange for their decision not to use competitive platforms. Alphabet shares fell by more than 2% after the news.
The decision by Judge James Donato of California is the result of an antitrust Epic Games’ lawsuit against Googlewhich began in 2020. The Fortnite maker and owner of the popular game store accused Google of anti-competitive practices, including payments to hardware companies and Android phone manufacturers so that they would not develop competitive app stores or use third-party ones.
In December 2023, the jury in the Epic Games lawsuit unanimously recognized that Google illegally dominates in the Android app and in-app payments market. The court found that Google Play and Google Play Billing were unlawfully linked, and that the distribution agreement with app developers and OEMs was anticompetitive.
The new decision could lead to a redistribution of the Android app market in favor of independent companies. The new restrictions in Google Play may allow developers to make more money bypassing Google’s rules or commissions. According to the ruling, starting in November, Google will not be able to do so for three years:
- Pay companies to launch apps exclusively or initially on Google Play
- Pay companies not to compete with Google Play
- Pay companies to pre-install Google Play on new devices
- Require developers to use Google Play Billing
- Prohibit notifications in programs about cheaper online offers on their websites
- Google should allow competitive Android app stores on Google Play
Epic Games and Google are to create a three-person committee that will address technical issues related to compliance.
The conflict started over in-app purchases offered by Epic Games in the Fortnite game. The company challenged Google and Apple’s control over the distribution of mobile applications. Its violation of the rules of the two monopolists led to the removal of its apps and related lawsuits.
During the proceedings, Epic Games focused on Google’s blocking of the app store market through agreements with phone manufacturers and preventing users from downloading programs Android from third-party sources.
Epic Games CEO Tim Sweeney previously said that Google’s corporate culture contributed to Epic’s victory, as Google representatives often documented business practices in emails or messages that came during the trial.
«This means that all app developers, stores, operators, and manufacturers have 3 years to build a dynamic and competitive Android ecosystem with such a critical mass that Google will not be able to stop it», — Sweeney writes.
In a blog post, Google said that it would ask the court to suspend the changes and appeal the court’s decision.
Source: CNBC
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