A federal court has ordered Google LLC to allow third-party app marketplaces on the Play Store.
The change is one of more than a half dozen that the search giant will be required to implement. The court order was issued today in connection with a long-running legal dispute between Google and Epic Games Inc., a major video game developer. Epic has also pursued litigation against Apple Inc. over its App Store, albeit with more limited success.
Epic originally filed suit against the two tech giants in August 2020. Its lawsuits placed an emphasis on the fees that Google and Apple applied to in-app purchases. At the time, both companies required that in-app purchases be processed using their respective billing systems, which charged a commission of up to 30%.
Last December, a federal jury found that Google’s practices in the mobile market are anticompetitive. The federal judge presiding over the case subsequently launched a legal process to determine how the anticompetitive practices in question should be remedied. Today’s court order is the fruit of that effort.
The first set of changes that Google has been ordered to implement will apply to the Play Store. Starting next year, the company must let developers make competing app marketplaces available for download in the Play Store. Google may apply cybersecurity restrictions to those competing services and even charge a fee for doing so, but only in a “strictly necessary and narrowly tailored” manner.
Another section of the court order specifies that rival app stores must be given access to the Play Store app catalog. At the same time, Google will have to provide a way for developers to opt out of having their services listed in such app stores.
The injunction also includes a number of related restrictions. Going forward, Google can’t compensate device makers or carriers for setting Play Store as the default app store on their customers’ handsets. Similarly, the search giant may not offer developers incentives to list their apps on the Play Store exclusively or before they make them available in rival platforms.
A second set of changes mandated by today’s injunction will affect Google’s payment processing business. The company must stop requiring that developers use its billing system to process in-app payments. Furthermore, Google will have to let developers inform users of alternative billing platforms platforms and provide links to those platforms in their apps.
Google has eight months to implement the remedies specified in the court order. From there, the changes will have to remain in place for three years, which is considerably less than the six years that Epic’s lawsuit had requested.
“The provisions are designed to level the playing field for the entry and growth of rivals, without burdening Google excessively,” Judge James Donato wrote in the court order. “As competition comes into play and the network effects that Google Play unfairly enjoys are abated, Google should not be unduly constrained as a competitor.”
Google and Epic will help set up a three-person technical committee to ensure that the search giant complies with the order. If the committee encounters an issue that it can’t resolve on its own, it may refer the matter to the court.
Google plans to challenge the injunction. Lee-Anne Mulholland, the company’s vice president of regulatory affairs, wrote in a blog post today that “we are appealing that underlying decision and we will ask the courts to pause Epic’s requested changes, pending that appeal.”