Google Play Must Permit Rival Android App Stores

A judge has instructed Alphabet to lift restrictions that prevent developers from setting up rival marketplaces and billing systems on Android devices that compete with its Google Play Store.

The injunction came during a case between Epic Games and Google where Epic convinced a jury that Google abused its power in the Android app market with its Google Play store policies.

US District Judge James Donato issued the injunction that takes effect November 1 barring Google for three years from paying developers to exclusively use its app store or prohibit them from telling customers about how to directly download apps.

Google also cannot force developers to use its billing features during that time too.

The company must also let rival app stores have access to its catalog for the next three years in a bid to help them develop, reported Bloomberg.

The case between Epic and Google began in 2020 with Epic arguing that Google Play rules and fees stifled competition and blocked app marketplaces. In December, jurors agreed with Epic and found that Google had engaged in anticompetitive conduct, thereby harming Epic.

“The question at hand is not whether Google violated the antitrust laws by failing to aid rivals, but what measures are necessary to restore fair competition in the face of the barriers found by the jury,” he wrote.

“Requiring Google to allow other app stores to be distributed through the Play Store for a discrete period is a modest step to correct the consequence of unlawfully preventing rival stores from reaching users and developers.”

Donato said he limited the injunction to three years because “the provisions are designed to level the playing field for the entry and growth of rivals, without burdening Google excessively.”

Google had told the judge it would take 12 to 16 months to add third-party apps to the Play Store, but Donato instead set a deadline of eight months.

Google contended that its partnerships help phones that run on Android better compete against Apple’s iPhone.

The judge noted that Google can take “reasonable measures” to ensure the security of its platform, and ordered the parties to recommend three people for a committee to review the technical aspects of those requirements.

Developers who find that Google’s security measures are too stringent can challenge them, with the onus on Google to prove they are necessary.

The latest ruling could have a potential impact of hundreds of millions for Google. “In a worst case scenario this could be a 20-30 per cent drag on gross app store sales of around $50 billion (A$73.99 billion), mostly subscriptions, which could be a $1 billion (A$1.48 billion)-$1.5 billion (A$2.22 billion) drag on the company’s gross profit, based on our estimates,” said Mandeep Singh, an analyst at Bloomberg Intelligence.

In August, four years after it was pulled from Apple and Google’s app stores, Epic Games brought back three in-house games – including the massively popular Fortnite – to iPhones in the EU and Android devices worldwide, courtesy of its new Epic Games Store. Epic Games aims to gain 100 million new installs of its Store by the end of the year.