Epic Games wins antitrust battle: US judge orders Google to open Android app market to competitors

A US judge has ordered Google to make significant changes to its mobile app business, following a legal battle with Epic Games.

The ruling requires Google to allow third-party app stores and in-app payment methods on Android devices, starting in November.

This decision, part of the larger case against Google’s monopolistic practices, marks a major shift for app developers and users.

Epic Games, which initially sued Google in 2020, views the decision as a victory for competition.

Google’s plan to appeal the ruling could delay these changes, but the injunction stands for now.

Key ruling forces Google to open Android app market

Judge James Donato issued an injunction compelling Google to revamp its Play Store operations.

Effective November 1, 2024, the company must allow Android apps from alternative sources, no longer monopolising app distribution on its platform.

For the next three years, Google will be prohibited from blocking third-party app stores or imposing preinstallation fees for its Play Store on device manufacturers.

This decision stems from a December 2023 jury verdict, which sided with Epic Games in its antitrust lawsuit.

The court ruled that Google had restricted competition by mandating that Android apps be exclusively distributed via its Play Store and forcing developers to use its payment system for in-app purchases.

Google to face major revenue losses

The ruling is likely to impact Google’s revenue stream significantly. Alphabet shares fell 2.5% to $164.39 following the announcement, underscoring investor concerns about the financial fallout.

Google’s Play Store generated billions through fees from app developers, who are currently required to use Google’s billing system, taking a 15-30% cut of all in-app purchases.

The injunction not only allows third-party app stores to operate freely on Android devices but also permits developers to bypass Google’s payment system, cutting into Google’s lucrative app store commission model.

Epic Games, known for its fight against Apple and Google’s app store fees, has long advocated for alternative payment methods and greater developer control.

Epic Games’ plans for new app stores by 2025

Epic Games CEO Tim Sweeney praised the ruling, stating it would give developers a “fighting chance” in the Android ecosystem.

Epic plans to launch its own app store on Google Play by 2025, challenging Google’s dominance.

This move could shift the power dynamics in mobile app distribution, offering developers a more competitive environment.

Sweeney noted that with alternative app stores gaining ground, developers would have more opportunities to market their apps independently, free from Google’s control over distribution and payments.

Google to appeal but faces growing antitrust scrutiny

Google has already signalled its intention to appeal the ruling to the 9th US Circuit Court of Appeals, and it plans to request a suspension of Donato’s injunction pending the appeal outcome.

The company warned that opening the Android ecosystem could have “unintended consequences” that might affect consumer privacy and security, echoing its arguments from the trial.

Along with this case, Google faces mounting pressure in other antitrust challenges, including investigations into its web search and advertising dominance.

These ongoing legal battles could result in further restrictions on Google’s business practices.

What’s next for Google and the Android ecosystem?

As Google navigates the appeals process, it must prepare for sweeping changes to its Play Store model. Developers, meanwhile, are preparing to capitalise on new opportunities that may arise from a more open Android marketplace.

If the ruling stands, the app store landscape could be drastically reshaped.

Android users would have greater flexibility in downloading apps and making in-app purchases, potentially driving down prices.

Concerns over privacy, security, and the consistency of user experience may emerge as more app stores enter the scene.

In the short term, Google’s bottom line is likely to take a hit, with revenue losses from app distribution fees.

The company’s ability to maintain its position as a leading app distributor may depend on how it adapts to these changes in the coming years.

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