In December, a jury found that Google violated U.S. antitrust laws through agreements and billing rules that unfairly boosted its Google Play app store. On Thursday, a judge began laying out how Google could be forced to change its business as a penalty. The solutions being considered could lead to the most significant shake-up ever in Google’s dominance of the Android universe.
fortnite Video game developer Epic Games, which defeated Google in the trial in which a jury declared the Play Store an illegal monopoly, is demanding that federal Judge James Donato prohibit Google from contracts that deter competition. Epic also wants Google to be forced to help competing stores include more apps, giving them a competitive boost. The changes could allow Epic to realize its long-standing plan to increase revenue by processing in-game purchases in fortnite and other titles without using Google’s payment system, and market games through its own application store.
Google maintains that Epic’s lawsuits would threaten the security of its users and harm the businesses of its partners, including Android device makers and app developers. The search firm is appealing the jury’s verdict, which could delay the application of any sanctions for many years or nullify them entirely. But in recent years Google has already had to make some costly changes in Europe and Asia due to court losses and new laws affecting the Play Store, and a trial is currently underway with Epic in Australia.
“I want to be clear: Google, as an illegal monopoly, will have to pay some penalties,” Donato told Epic and Google at a hearing in San Francisco on Thursday. He explained that Google’s loss requires him to release the company’s control over the Android ecosystem in a way that ends Google’s illegal monopoly and also eliminates its ill-gotten gains from years of unfair dominance.
That would mean major changes for the industry that has built up around Google’s Android operating system and, potentially, more options for consumers. It could require Google to invest money in new projects to get things right, Donato said.
Donato expressed frustration with Google’s claims that any changes would be bad for consumers and other businesses. “Jumping up and down and saying the new way will be a world no one wants to live in is unfounded,” he said. But he also spent hours at the hearing questioning two economists, one of whom appeared on behalf of each company, about how to craft sanctions for Google without being unreasonable.
Among Epic’s requests is that Google be prohibited from reaching agreements that prevent or discourage companies from working with alternatives to its app store. In the past, the company has required hardware companies that want to offer Google Play on their devices to agree not to work with or promote alternative app stores. That prevented most consumers from seeing other app stores, since most device makers want to offer Google’s app store because it is the largest.
Rival app stores, such as those from Amazon and Samsung, have also had difficulty persuading developers to list their apps outside of Google Play, because maintaining apps in multiple stores requires additional work. To level the playing field, Epic is proposing that Google be required for six years to provide rival stores with a way to list apps hosted on Google Play. That would allow people to explore alternative stores without feeling like they’re missing out on popular apps, giving the store a better chance of long-term success.
