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

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

The order, issued by U.S. District Judge James Donato, will require Google to make several changes that the Mountain View, California-based company has opposed, including a provision that will require the Play Store for Android apps to distribute competing third-party app stores so that consumers can download them to their phones if they wish.

The judge’s decision will also give rivals access to millions of Android apps in the Play Store library, allowing them to offer a competitive selection.

Donato is giving Google until November to make the changes dictated by his order. The company insisted it would take 12 to 16 months to design the safeguards needed to reduce the risk of potentially malware entering competing Android app stores and infecting millions of Samsung phones and other mobile devices running free Android software.

The court-ordered change is intended to prevent Google from walling off 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 successful companies and helped boost the market value of its parent company Alphabet Inc. up to USD 2 trillion.

Google said in a blog post that it would ask the court to stop the pending changes and would appeal the court’s decision.

Donato also ruled that for a three-year period ending 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 an Android app distribution platform or store. It also cannot pay or share revenue to developers to first or exclusively launch an app on the Google Play Store, nor can it enter into agreements 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 billing system or tell customers they can download apps elsewhere and potentially cheaper.

The Play Store has been earning billions of dollars annually for years, largely thanks to the 15% to 30% commission that Google imposes on digital transactions made in Android apps. It’s a fee structure similar to what Apple is implementing in its iPhone app store — a structure that prompted video game maker Epic Games to file an antitrust lawsuit four years ago to foster competition that could help lower prices for both application developers and consumers.

A federal judge largely sided with Apple in a September 2021 decision that was upheld by an appeals court. Still, the jury found in favor of Epic Games after a four-week trial that ended last year and returned a verdict that found the Play Store an illegal monopoly.

That prompted another round of hearings this year to help Donato determine what steps needed to be taken to restore fair competition. Google argued that Epic Games was seeking radical changes, burdening the company with costs of up to $600 billion. Epic claimed that Google could level the playing field for as little as $1 million. It’s unclear how much Donato’s changes will cost Google.

Although Epic lost its antitrust case against Apple, Donato’s ruling could still have an adverse impact on the iPhone app store as another federal judge weighs whether Apple is making it easy enough to promote different ways for consumers to pay for digital transactions. U.S. District Judge Yvonne Gonzalez Rogers’ decision in the case ordered Apple to allow in-app links to alternative payment systems, but Epic argues that this provision is undermined by creating another commission system that limits consumer choice.

The upcoming changes to the Play Store may be the first unwelcome shock that antitrust law will cause for Google. In the largest antitrust case brought by the U.S. Department of Justice in a quarter of a century, U.S. District Judge Amit Mehta ruled in August that the dominant search engine Google was also an illegal monopoly and is now preparing to begin hearings to punish Google for this bad behavior. Google is appealing Mehta’s search engine ruling, hoping to avoid a penalty that could hurt its business even more than the changes it ordered from the Play Store.