Antitrust court orders Google to open its Play Store to competition | MoginRubin LLP

The injunction is a victory for Epic Games and other app developers who want alternatives to the Google-controlled App Store.

U.S. Judge James Donato has ordered the company to open its Google Play Android app store to competition for at least three years, striking another blow to Google’s shield of multi-market dominance. The injunction was issued on Monday (October 7) as part of the antitrust lawsuit filed by Epic Games, developer of the popular video game Fortnite (Epic vs GoogleCase No. 3:20-CV-05671-JD, ND California).

A jury in San Francisco concluded in December 2023 that Google’s App Store Guidelines, which require app developers to use Google’s store and payment system and prohibit alternative app stores, violated Sections 1 and 2 2 of the Sherman Act. The court requires Google to take the following steps to promote competition, including:

• Allowing third-party app stores: Google needs to allow users to download third-party app stores directly from the Play Store app.
• Allow alternative payment systems: App developers can use their own billing systems for in-app purchases instead of being forced to use Google Play Billing.
• Repeal of the steering protection regulations: Google can no longer prevent app developers from informing users of other ways to download and pay for apps.

Judge Donato’s decision is intended to address the impact of Google’s conduct, which the jury found monopolized the market for “Android app distribution” and the market for “Android in-app billing services.” The jury concluded that agreements with application developers and distribution and revenue-sharing agreements with mobile device manufacturers unreasonably restricted trade, as did Google’s side deals with app developers to prevent them from challenging the Google Play Store monopoly. In addition, Google has unlawfully tied the use of the Google Play Store to the Google Play billing system. Read my commentary written shortly after the verdict.

Epic sued Google in 2020 for banning it from setting up its own store and processing payments for sales of its Android applications, including the blockbuster game Fortnight. Epic knowingly violated Google’s restrictions in 2020 by updating Fortnite to allow players to purchase software directly from Epic, thereby circumventing Google’s fees for Play Store purchases, which led Google to deplatform Fortnite ban, which triggered the court battle, which other developers eventually joined and proposed classes of injured plaintiffs.

After the December ruling, Google agreed to pay $700 million in damages and changing several of its Google Play Store practices. The company also promised $630 million in refunds to consumers who made purchases on the Google Play Store between August 2016 and September 2023 and paid plaintiff states $70 million.

Last month, Epic sued Samsung Electronics, an Android smartphone maker, over an agreement with Google to maintain its monopoly. This agreement was extremely lucrative for Samsung (Epic Games, Inc. v. Samsung Electronics Co. Ltd, et al.No. 3:24-cv-06843, NDCalif.). Read more.

Epic didn’t fare so well in its similar case against Apple Inc. for monopolizing sales and payment processing for iOS applications by requiring that all sales and payments of iOS apps go through Apple’s App Store have to be. SSee our previous post on the Ninth Circuit’s opinion in this case by Tim LaComb of MoginRubin.

In an earlier commentI wrote: “The question for antitrust law is: At what point do… ‘marketplace platforms’ deserve to be treated as markets under the control of the platform operator?” [E]Private marketplaces that are organized as part of a private company should also be subject to antitrust supervision.”

What I suggested in this comment has now come true in the Epic vs. Google case.