Google Must Reform App Store”>Alphabet
Ordered to Open Android to Rivals in Latest Antitrust BlowAlphabet, the parent company of Google, has been ordered by a federal judge in San Francisco to open its Android operating system to rivals. This ruling allows competitors to create their own app marketplaces and payment systems, challenging Google’s dominant position with its Google Play Store. The decision comes as a result of a successful lawsuit filed by Epic Games, the maker of popular video game Fortnite. Epic argued that Google suppressed competition in Android apps and used its monopoly power to impose excessive fees.
US district judge James Donato issued an injunction that prohibits Google from paying developers for exclusive launches or requiring customers to use its billing system, which charges fees up to 30 percent. The injunction also prevents Google from striking revenue share deals with mobile device manufacturers like Samsung and LG, prohibiting them from preinstalling the Play Store on their home screens or preventing rival app distribution platforms.
As part of the ruling, Google must grant third-party access to its app library for three years so that competitors can build competitive products. Epic alleged in the lawsuit that Google paid off network operators and game developers like AT&T, T-Mobile, and Activision Blizzard to prevent them from launching Play Store rivals.
The verdict is a significant blow for Google as it could impact a lucrative stream of revenue generated by its Play Store. In 2021 alone, evidence presented during the case showed that the company made an operating profit of $12 billion from this platform (though it does not routinely disclose performance figures). Following the news, Alphabet shares fell 2.3 percent.
Google plans to appeal against the verdict and has requested that implementation be put on hold due to concerns about customer privacy and data security. The company argues that Apple’s App Store competes directly with Android but was not subject to similar scrutiny in this case.
This injunction could have broader implications for other major tech companies’ control over their mobile app stores. Epic previously lost a related case against Apple last year when a California judge ruled that Apple did not violate any laws by imposing rules blocking rival stores and payment methods on iPhones—an outcome upheld by an appeals court.
Epic CEO Tim Sweeney commented on Twitter: “All app developers…have 3 years…to build…a competitive Android ecosystem.” He also noted that while this ruling applies only within the United States, legal battles will continue worldwide.
In addition to this antitrust battle over app stores, Google recently lost another case brought forth by the US Department of Justice regarding online search monopolization allegations. On Tuesday, remedies proposed by DOJ may include drastic measures such as breaking up Alphabet altogether. Furthermore, DOJ is suing Google over alleged monopolistic control in digital advertising—a trial currently underway since last month in Virginia.
