A judge ordered Google to open its Android app store to competition

SAN FRANCISCO (AP) — A federal judge on Monday ordered Google Inc. to tear down the digital walls that protect its Android app store from competition as punishment for maintaining an illegal monopoly that helped expand the company’s Internet empire.

The injunction from U.S. District Judge James Donato will require Google to make several changes that the Mountain View, California, company has been resisting. This includes a provision that would require the Play Store for Android apps to distribute competing third-party app stores so consumers can download them to their phones, if they wish.

The judge’s order will also make millions of Android apps in the Play Store library available to competitors, allowing them to offer a competitive lineup.

Donato is giving Google until November to make the revisions it dictates in his application. The company insisted that it would take 12 to 16 months to design the necessary safeguards to reduce the chances of potential malware making its way into competing Android app stores and infecting millions of Samsung phones and other mobile devices running its free Android software.

The court-ordered overhaul aims to prevent Google from alienating competition in the Android app market as part of an effort to protect a commission system that has been a boon to one of the world’s most prosperous companies and helped lift its market value. Parent company Alphabet Inc. To 2 trillion dollars.

Google said in a blog post It will ask the court to temporarily halt the pending changes, and will appeal the court’s decision.

Donato also ruled that for a period of three years ending on November 1, 2027, Google will not be able to share revenue from its Play Store with anyone who distributes Android apps or is considering launching a platform or store to distribute Android apps. They also won’t be allowed to pay developers, or share revenue, so they release an app in the Google Play Store first or exclusively, and they can’t make deals with manufacturers to pre-install the Google Play Store in any specific location on an Android device. It also won’t be able to require apps to use its own billing system or tell customers they can download apps elsewhere, perhaps at a cheaper price.

The Play Store has been earning billions of dollars annually for many years, primarily through the 15% to 30% commissions that Google charges on digital transactions completed within Android apps. It’s a fee structure similar to the one Apple deploys in its iPhone App Store — a structure that prompted video game maker Epic Games to file antitrust lawsuits four years ago in an attempt to foster competition that could help lower prices for both app makers and Consumers.

Federal judge I mostly sided with Apple In a decision issued in September 2021 and upheld by the Court of Appeal. still, The jury favored Epic Games After a four-week trial completed last year produced a ruling that called the Play Store an illegal monopoly.

Pay it Another round of hearings this year To help Donato determine what steps should be taken to restore fair competition. Google said that Epic Games was seeking some drastic changes, burdening the company with costs that could reach $600 billion. Epic claimed that Google could level the playing field for less than $1 million. It’s not clear how much the changes Donato requested would cost Google.

Although Epic lost its antitrust case against Apple, Donato’s ruling could still have ripple effects on the iPhone App Store as another federal judge considers whether Apple is making it easy enough to promote different ways consumers can… During which payment is made for digital transactions. Apple was ordered to allow in-app links to alternative payment systems as part of U.S. District Judge Yvonne Gonzalez Rogers’ decision in the case, but Epic claims that requirement was undermined by creating yet another commission system that stifles consumer choice.

The upcoming change to the Play Store may be just the first unwelcome shock that antitrust law delivers to Google. In the largest antitrust case brought by the US Department of Justice in a quarter century, US District Court Judge Amit Mehta announced in August that Google… The dominant search engine to be an illegal monopolyAlso, it is now preparing to begin hearings on how to punish Google for this bad behavior. Google is appealing Mehta’s ruling in the search engine case in hopes of avoiding a penalty that could hurt its business more than changes ordered in the Play Store.

“If the ruling makes it through the appeals process, Google will almost certainly take a hit to revenue,” said Evelyn Mitchell-Wolf, an analyst at Emarketer. “There’s no doubt that some of the biggest app developers like Epic Games will start encroaching on the Google Play Store’s market share, meaning Google will lose its usual share of subscriptions and in-app purchases.”

The analyst added that while the Google Play Store will likely continue to benefit from brand recognition since it has been the default Android app store for so long, “some consumers may defect if they can get better deals on their favorite apps elsewhere.” . App developers are likely to seize the opportunity to inform consumers about direct downloads.

“So Google may see lower revenue from the Play Store even among Android users who stick to default,” Mitchell Wolf said.

Alphabet shares fell $4.08, or 2.4%, to close Monday at $162.98.