Federal Court Orders Google to Open Android to Third-Party App Stores in Antitrust Case

The Google logo is pictured at the entrance to the Google offices in London, Britain, on Jan. 18, 2019. Hannah McKay/Reuters

In a major ruling, a federal court has issued a permanent injunction requiring Google to significantly alter its Android operating system and Google Play Store, specifically mandating that the tech giant allow greater access for third-party app stores.

This follows a jury’s unanimous verdict that Google violated antitrust laws in its dealings with Epic Games, Inc.

The ruling, issued by U.S. District Judge James Donato on Oct. 7, will take effect on Nov. 1 and remain active for three years within the United States.

The injunction arises from the case Epic Games, Inc. v. Google LLC et al., where the jury found Google guilty of monopolization under Section 2 of the Sherman Act, unlawful restraint of trade under Section 1 of the Sherman Act, and the California Cartwright Act, and of “tying” under the same statutes.

In this context, “tying” refers to Google’s practice of requiring app developers to use its own in-app payment system, Google Play Billing, as a condition for distributing their apps on the Google Play Store.

The court said that this practice restricted competition in the Android app distribution and in-app billing markets.

Central to the court’s order is the requirement for Google to permit third-party app stores to access the Google Play Store’s full catalog of apps and to allow these stores to be distributed through the Play Store itself.

“The injunction must overcome the effects by providing access to the catalog of Play Store apps for a period of time sufficient to give rival stores a fair opportunity to establish themselves,” the court stated.

Donato had previously indicated during an August hearing that the injunction would not micromanage Google’s operations but would instead establish broad guidelines to foster competition.

Key provisions of the injunction include prohibiting Google from the following actions:

• Sharing Play Store revenue with any entity that distributes Android apps or is considering launching an app distribution platform.
• Conditioning payments or access to Google products on agreements that enforce Play Store exclusivity.
• Requiring the use of Google Play Billing in apps distributed on the Play Store.
• Preventing developers from communicating with users about alternative payment methods or pricing outside the Play Store.

The court also ordered Google to allow third-party app stores access to the Google Play Store’s app catalog and to permit these stores to be distributed through the Play Store.

Google has expressed opposition to the ruling and announced its intention to appeal. In a statement following the decision, Google’s Vice President of Regulatory Affairs Lee-Anne Mulholland argued that the injunction threatens user privacy and security, as well as the integrity of the Android ecosystem.

“Android has helped expand choice, reduce prices, and democratize access to smartphones and apps,” Mulholland said. “The initial decision and today’s Epic-requested changes put that at risk and undercut Android’s ability to compete with Apple’s iOS.”

Google contends that Android has always provided a level of openness unmatched by Apple’s iOS, which strictly prohibits third-party app stores. The company further argued that the court’s order could compromise the security and user experience that differentiates Android from its competitors.

Epic Games had accused Google of using its dominant market position to impose unfair restrictions on app developers, particularly concerning in-app payment systems and the distribution of apps outside the Google Play Store.

The court concluded, “In light of the jury verdict and supporting evidence, it is perfectly appropriate that Google be 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.”

As the legal battle continues, Google stated, “We look forward to continuing to make our case on appeal, and we will keep advocating for what is best for developers, device manufacturers, and the billions of Android users around the world.”