Judge Orders Google to Revamp App Business

By Mike Scarcella

(Reuters) – A U.S. judge ordered Alphabet’s Google to overhaul its mobile app business, providing Android users with more avenues for app downloads and payment options, following a jury verdict in favor of “Fortnite” maker Epic Games.

The injunction, issued by U.S. District Judge James Donato in San Francisco, mandates that Google open its Play app store to competition by allowing apps to be sourced from rival platforms.

According to the judge’s order, Google is prohibited from restricting in-app payment methods and must enable users to download competing third-party app platforms or stores for a period of three years. Additionally, Google cannot financially incentivize device manufacturers to preinstall its app store or share revenue from the Play store with other distributors.

Following the ruling, Alphabet shares fell by 2.2%. Donato stated that a technical committee, consisting of a member selected by both Google and Epic, will be established to facilitate the implementation and monitoring of the injunction.

Google has indicated plans to appeal the ruling that triggered the injunction and may seek a pause from the 9th U.S. Circuit Court of Appeals. The injunction is set to take effect on November 1, allowing Google time to align its practices with the order.

Epic’s 2020 lawsuit accused Google of monopolizing app distribution and payment methods on Android. The company successfully convinced a jury in December 2023 that Google stifled competition, leading to Donato’s injunction.

Google contended that Epic’s proposed reforms were costly and overly restrictive, potentially jeopardizing consumer privacy and security. However, Judge Donato was dismissive of these arguments, emphasizing that Google owes a responsibility to rectify its monopolistic actions.

In a separate antitrust case, U.S. District Judge Amit Mehta ruled against Google, stating that it had illegally monopolized web search. Google is also facing a trial related to its dominance in advertising technology.

Google denies all claims in these cases.