A federal judge in America has ruled that Alphabet will have to open its operating system, Android, so that other companies can create their own app stores and payment systems to compete with Google’s Play Store.
The successful action was filed in 2020 by Epic Games, creator of Fortnite. According to the company’s claim, Google abuses its market power and acts monopolistically by restricting access to competitors and charging excessive fees in the app store, around 30%.
The court order issued by Judge James Donato of the federal court in San Francisco prohibits Google from paying developers to launch apps exclusively in its store and also prevents the Big Tech from forcing customers to use only their payment system.
Donato had already ruled in December that Google violated antitrust laws; now, the judge has decided on remedies against monopolistic behavior.
The decision, which takes effect on November 1st and will last for three years, also prevents Google from making deals with phone manufacturers for devices to come preloaded with the Play Store.
This is another defeat for Google in American courts in antitrust cases. In August, the company lost a case brought by the Department of Justice accusing it of exercising a monopoly in the search tools market. The remedies will be published today.
According to Epic, Google paid money to telecommunications operators like AT&T and T-Mobile, as well as developers like Activision Blizzard, to dissuade them from launching their own app stores.
Evidence presented in the case shows that Google made $12 billion from the Play Store in 2021.
Alphabet’s shares, the parent company of Google, fell more than 2% yesterday after the decision was made public. Today they are stable.
Google said it will appeal. In its defense, it argued that Android competes directly with the operating system and app store of Apple. It also said that the court’s decision could affect the privacy of its customers’ data.
Epic CEO Tim Sweeney celebrated the decision and said that developers now have three years to “build a vibrant and competitive ecosystem” for Android.
The court decision only applies to America. Epic is expected to file similar lawsuits in other markets.
Part of the monetization of Fortnite comes from selling character customizations in the game.
Google and Apple charge fees between 15% and 30% on apps, subscriptions, and games sold in their stores.
According to Google, 99% of developers are eligible to pay fees of 15% or less.
According to CNBC, the consultancy Sensor Tower estimates that consumers spent $124 billion in these stores in 2023. In the first quarter of this year, the value reached almost $36 billion, a 9.5% increase compared to the same period last year.
Epic lost a similar case against Apple. However, the judge allowed the game developer to offer alternatives for customers to make purchases outside the Apple App Store.
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Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
