Epic wins the lawsuit! US judge rules that Google must open the Android system to third-party stores

According to the Zhitong Finance and Economics APP, recently, Judge James Donato in the Epic vs. Google (GOOG.US, GOOGL.US) lawsuit made a final ruling, determining that Google's Android app store engaged in illegal monopolistic behavior, and ordered Google to open the Google Play app store to competitors within three years of the judgment taking effect.

Under the ruling, Google must distribute third-party app stores of competitors within the Google Play app store, and allow these third-party app stores access to the entire app directory of Google Play, unless developers choose to opt out. This is one of the main demands raised by Epic, but not the only victory achieved by Epic today.

From November 1, 2024, to November 1, 2027, Google must also: stop requiring apps in the Google Play store to use the Google payment system (the jury found that Google illegally tied the payment system to its app store); allow Android developers to introduce other payment methods to users; allow Android developers to provide app download links outside of the Play Store; allow Android developers to freely set app prices, not subject to the restrictions of the Play Billing system.

At the same time, Google cannot: share app revenue with any individual or entity that is currently or planning to launch an app store; provide funds or incentives to developers to exclusively or preferentially release apps on the Play Store; prevent developers from releasing apps on competitor stores by providing funds or incentives; provide funds or benefits to device manufacturers or carriers to preload the Play Store or not preload competitor app stores.

Nevertheless, Google will still retain a certain level of control over security and safety issues in the Google Play store. The ruling stipulates that Google can take reasonable measures to manage these issues, but these measures must be "strictly necessary and targeted" and comparable to how Google currently manages the Google Play store. Google may also charge for these management measures. Epic has repeatedly argued that Google should not hinder the normal operation of third-party app stores through management.

Judge Donato gave Google eight months to establish a system, and a three-person technical committee jointly selected by Epic and Google will review any disputes.

However, Epic did not win all its demands. It had hoped that the judge would extend the open period of Google Play from three years to six years, also wanted users to be able to easily sideload apps by tapping a button, and requested Google to stop bundling Android APIs with Google Play.

Donato explained why he did not extend it to six years, writing, "These provisions are designed to provide a fair competitive environment for competitors without imposing an undue burden on Google. As competition intensifies, the unfair advantage Google Play gains through network effects will also diminish, and Google as a competitor should not be overly restricted." Epic Games first filed a lawsuit against Google on August 13, 2020, and on the same day, they also filed a lawsuit against Apple (AAPL.US). The well-known game developer attempted to circumvent the 30% in-app purchase fee charged by Google and Apple in its popular game "Fortnite" through a carefully planned action. The two tech giants quickly retaliated by removing "Fortnite" from their platforms, sparking the #FreeFortnite movement and two lawsuits against their alleged illegal monopolistic practices.

The Apple case has already concluded, with Apple largely winning the case. In January this year, the Supreme Court rejected Epic's final appeal. The only legal victory Epic achieved was overturning Apple's "anti-steering rule," theoretically allowing developers to inform users on how to bypass Apple's payment system.

In contrast, the Google case has taken longer to be resolved, with a different outcome. Epic has repeatedly proven unfair treatment by Google towards developers and intentional concealment of facts. In December last year, a jury unanimously ruled that the Google Play store and Google Play billing services constituted illegal monopolistic behavior, and the various special deals Google made with game developers and phone manufacturers were deemed anti-competitive.

In August this year, Judge Donato warned Google that they would pay the price for their actions. During a remedial hearing, he stated, "We will dismantle these barriers, this is the inevitable result." He dismissed Google's defense, stating that meeting Epic's demands would not require too much time or money.

It is currently unclear whether Google must immediately comply with the court's requirements. Google has stated that they will appeal the judgment, and similar to Apple, Google may request the appellate court to stay Judge Donato's order, continuing to delay compliance through legal means.

Last week, Epic filed a second lawsuit against Google and Samsung, alleging that these two companies were attempting to circumvent the impending injunction by increasing the complexity of third-party app store operations. This case is related to the current case and will also be heard by Judge Donato.

As of Monday's close, Google's stock fell by 2.47% to $164.39