Prepare for a shocking punishment in the Android app store

Michal Liedtke
| Associated Press Press Agency

San Francisco — A federal judge said Wednesday he will order major changes to Google’s Android app store to punish the company for creating a system that a jury found was an illegal monopoly that harmed millions of consumers and app developers.

During a three-hour hearing in San Francisco, U.S. District Judge James Donato made clear that the changes he plans to make are likely to include an order requiring the Google Play store for Android phones to offer consumers the ability to download alternative app stores.

Donato has been considering how to punish Google since last December, when a jury found the Play Store to be a monopoly after a four-week trial. The verdict focused on Google’s near-exclusive control over the distribution of apps for Android phones and the billing systems for digital commerce that take place on them—a system that generates billions of dollars in annual revenue for the company.

In protest at the judge’s potential demands, Google raised the specter of consumer devices being infected with malware downloaded from third-party app stores, which would create “security chaos.”

However, Donato has repeatedly stressed the need for a major overhaul of the Play Store, even if it causes trouble for Google and results in a hefty bill that the company estimates could be as much as $600 million, depending on what the judge orders.

“We’re going to tear down the barriers, that’s what’s going to happen,” Donato told Google attorney Glenn Pomerantz. “When you have a mountain built on bad behavior, you’re going to have to move that mountain.”

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Donato said he hopes to issue an executive order outlining the framework for the Play Store changes in the next few weeks, perhaps before Labor Day weekend.

Google’s tactics in the penalty phase of the Play Store case could foreshadow its strategy in a similar round of so-called “remedies hearings” that will be held in an even larger antitrust case that also resulted in a judge declaring the dominant search engine an illegal monopoly. Those hearings, focused on the crown jewel of Google’s empire, are set to begin on September 6 in Washington, D.C.

In the case of the Play Store, Donato is apparently still grappling with the question of how much time Google should be given to make changes to the Android operating system and Play Store, as well as how long the restrictions he has imposed should remain in place.

Google wants 12 to 16 months to implement the changes to ensure a smooth transition and avoid glitches that could affect the performance of Android smartphones. Epic Games, the video game company that filed an antitrust lawsuit that declared the Play Store a monopoly, says Google could do everything in about three months at a cost of about $1 million.

Donato, without disclosing a specific timeline, said he does not intend to give Google as much time as the company would like to make the necessary changes.

“Google tells me it will take eons for all this to happen, but I am skeptical,” the judge said. “I have my doubts that all this brainpower won’t solve these problems in less than 16 months.”

Epic Games wants Donato’s injunction to last for six years, but the judge said Wednesday he thinks that proposal is too long. He wondered aloud whether a five-year injunction would be more appropriate. Google wants the injunction to expire after a year or two.

Donato assured Google that he has no intention of attempting to micromanage the company’s operations, although he is preparing it for major changes.

“The idea is to create a garden of competing app stores,” the judge said.