Antitrust Court Orders Google to Open Up its Play Store to Competition

Knocking another dent in the shield of Google’s multi-market dominance, U.S. Judge James Donato has ordered the company to open its Android app store, Google Play, to competition for at least three years. The injunction was handed down on Monday (Oct. 7) in the antitrust suit brought by Epic Games, developer of the popular video game Fortnite (Epic v. Google, Case No. 3:20-CV-05671-JD, N.D. Calif.).   

A San Francisco jury in December 2023 found that Google’s app store policies, which require app developers to use Google’s store and payment system and prohibiting alternative app stores, violate Sections 1 and 2 of the Sherman Act. The court is requiring Google to take the following steps to promote competition, including:  

• Allowing third-party app stores: Google must allow users to download third-party app stores directly from the Play Store app.  
• Permitting alternative payment systems: App developers will be able to use their own billing systems for in-app purchases instead of being forced to use Google Play Billing.  
• Removing anti-steering provisions: Google will no longer be able to restrict app developers from informing users about other ways to download and pay for apps.  

Judge Donato’s decision is intended to remedy the effects of Google’s conduct, which the jury said monopolized the “Android app distribution” market and “Android in-app billing services” market. The jury found that agreements with application developers and its distribution and revenue sharing agreements with mobile device manufacturers unreasonably restrained trade, as did Google’s side-deals with app developers to keep them from challenging the Google Play Store monopoly. Google also unlawfully tied the use of Google Play Store to Google Play's billing system. Read my commentary written shortly after the verdict.

Epic sued Google in 2020 for prohibiting it from establishing its own store and payment processing for the sale of its Android applications, including the blockbuster Fortnight game. Epic knowingly violated Google’s restrictions in 2020 by updating Fortnite to allow players to buy software directly from Epic, avoiding Google’s fees on Play Store purchases, prompting Google to ban Fortnite from the platform, setting up the court battle, eventually joined by other developers and proposed classes of aggrieved plaintiffs.

Following the December verdict, Google agreed to pay $700 million in damages and to change several of its Google Play Store practices. The company also promised $630 million in restitution to consumers who made purchases on the Google Play Store between August 2016 and September 2023 and to pay the plaintiff states $70 million.
 
Last month, Epic sued Samsung Electronics, a manufacturer of Android smart phone, for agreeing with Google to maintain the latter’s monopoly. That agreement was highly lucrative for Samsung (Epic Games, Inc. v. Samsung Electronics Co. Ltd, et al., No. 3:24-cv-06843, N.D.Calif.). Read more.

Epic didn’t fare as well its similar case against Apple Inc. for monopolizing the sale and payment processing for iOS applications by requiring all iOS app sales and payments to be transacted through Apple’s App Store. See our previous post on the Ninth Circuit opinion in that case by MoginRubin’s Tim LaComb.

In a previous comment, I wrote, “The question for antitrust is: At what point do … ‘marketplace platforms’ deserve to be treated as markets under the control of the platform operator? [E]ven private marketplaces organized within the confines of a private company should be subject to antitrust oversight.”

What I suggested in that comment has now transpired in Epic’s case against Google.