Injunction in Epic case gives rival app stores three years to catch up to Google.
Google Play gift cards in a shop in New York on July 5th, 2024.
A federal judge yesterday ordered Google to open up the Google Play Store and its collection of apps to third-party app stores as part of a US-wide injunction stemming from Epic Games' antitrust victory over the company. The injunction is scheduled to take effect on November 1, though Google will have up to eight months to implement certain provisions.
For three years, Google will have to let third-party Android app stores access the Google Play Store's catalog of apps "so that they may offer the Play Store apps to users," said the injunction issued by US District Judge James Donato of the Northern District of California.
App developers will have some control over which app stores their software is distributed on. "Google will provide developers with a mechanism for opting out of inclusion in catalog access for any particular third-party Android app store," the injunction said.
Google will be required to allow distribution of third-party Android app stores through the Google Play Store, making it easier for users to install different app stores without sideloading. Donato further prohibited Google from requiring the use of its own billing system for apps distributed on the Google Play Store, including for in-app purchases.
Some provisions relate to deals with phone makers and carriers that may offer devices with preinstalled app stores. "For a period of three years ending on November 1, 2027, Google may not condition a payment, revenue share, or access to any Google product or service, on an agreement with an original equipment manufacturer (OEM) or carrier to preinstall the Google Play Store on any specific location on an Android device," the injunction said. A similar condition applies to any "agreement with an OEM or carrier not to preinstall an Android app distribution platform or store other than the Google Play Store."
Judge gives competitors three years to catch up
In an order explaining the injunction, Donato said he limited the requirements to three years "because the provisions are designed to level the playing field for the entry and growth of rivals, without burdening Google excessively. 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."
At trial, the jury ruled in Epic's favor on its Sherman Act claims of monopolization, unlawful restraint of trade, and tying. Donato explained that a remedy in antitrust cases "is not limited simply to prohibiting conduct found to be anticompetitive. Rather, the Court has discretion to fashion a remedy directed to the effect of the anticompetitive conduct."
Epic was "illegally and unfairly foreclosed from using its own in-app billing services while distributing its Fortnite app through the Google Play Store because of Google's anticompetitive practices," and "illegally and unfairly foreclosed from competing in the market for Android in-app billing services for digital goods and services transactions," Donato wrote.
Donato added that the "harms are ongoing and cannot be made right simply by Google writing Epic a large check." The injunction is in the public interest because it will help restore "free and unfettered competition," he wrote. Google is also "enjoined from sharing Play Store revenues with current or potential Android app store rivals, and from imposing contractual terms that condition benefits on promises intended to guarantee Play Store exclusivity."
Donato's order said that Google on several occasions "fired a blunderbuss of comments and complaints that are underdeveloped and consequently unhelpful in deciding the issues." He also rejected some of Epic's proposals because they would have "threatened a degree of judicial oversight that would amount to micromanagement of Google's business. It is not for the Court to decide the day-to-day business issues of Android app distribution and in-app billing."
Google plans appeal
Epic Games CEO Tim Sweeney wrote that the injunction "means all app developers, store makers, carriers, and manufacturers have 3 years to build a vibrant and competitive Android ecosystem with such critical mass that Google can't stop it."
Google issued a response saying it will appeal the underlying verdict and "will ask the courts to pause Epic's requested changes, pending that appeal."
The court-ordered "changes would put consumers' privacy and security at risk, make it harder for developers to promote their apps, and reduce competition on devices," Google VP of Regulatory Affairs Lee-Anne Mulholland wrote. "Ultimately, while these changes presumably satisfy Epic, they will cause a range of unintended consequences that will harm American consumers, developers and device makers."
Mulholland also said the injunction will "undercut Android's ability to compete with Apple's iOS."
"These Epic-requested changes stem from a decision that is completely contrary to another court's rejection of similar claims Epic made against Apple—even though, unlike iOS, Android is an open platform that has always allowed for choice and flexibility like multiple app stores and sideloading," she wrote.
Judge dismisses Google arguments
Donato's order allows Google to impose security restrictions on third-party apps, but he said that Google must show that any restrictions are necessary.
"As Google has suggested, there are potential security and technical risks involved in making third-party apps available, including rival app stores," Donato wrote. "The Court is in no position to anticipate what those might be, or how to solve them. Consequently, Google will have room to engage in its normal security and safety processes. To the extent Google imposes requirements along these lines on rival app stores, it will... bear the burden when challenged of establishing that the requirements were strictly necessary to achieve safety and security for users and developers."
The injunction, Donato wrote, "must not only prohibit the specific anticompetitive conduct that Google engaged in, but also undo the consequence of Google's ill-gotten gains." But the requirements, such as the one forcing Google to let third-party app stores access the Google Play Store catalog, have some limits:
The injunction must bridge the moat. Even so, the catalog access provision is narrowly tailored to remediate the unfairly enhanced network effects Google reaped without unfairly penalizing its success as a first mover. To that end, if a rival app store does not have a relationship with a developer and so cannot fulfill a download request by a user, the rival will direct the download request to the Google Play Store. In that case, the Google Play Store will fulfill the download request and keep the associated revenue, if any, and the download will be made pursuant to the Google Play Store's policies. All that the catalog access does is level the playing field for a discrete period of time so that rival app stores have a fighting chance of getting off the ground despite network effects and the disadvantage of offering a "catalog of app/games" that is too "limited" to attract users and developers in a two-sided market.
Donato is giving Google eight months to implement the technology needed to allow distribution of third-party app stores through Google Play, and eight months to give third-party stores access to the Google Play Store catalog of apps.
"Google will have up to eight months from the date of this order to implement the technology and procedures necessary to comply with this provision, and the three-year time period will start once the technology and procedures are fully functional," he wrote. A technical committee will oversee the process, "with the Court serving as the final word when necessary."
Donato's 17-page order did not address every one of Google's arguments, because the judge decided some of them were too weak to warrant a response. "As noted, Google's modus operandi in this case has been to deluge the Court in an ocean of comments, many of which were cursory and undeveloped. The Court declines to take up Google's objections that were not fully developed in their presentation to the Court," he wrote.
Jon is a Senior IT Reporter for Ars Technica. He covers the telecom industry, Federal Communications Commission rulemakings, broadband consumer affairs, court cases, and government regulation of the tech industry.
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