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• U.S. District Judge James Donato has ordered Google to overhaul its app store policies, following a verdict in favor of Epic Games.
• Google is prohibited from blocking competing in-app payment methods and must allow users to download third-party Android app platforms.
• Google plans to appeal the verdict and argues the changes could harm consumers, developers, and device makers.
• The ruling, which takes effect on Nov. 1, is a significant development in the ongoing debate over tech monopolies and their impact on competition.

In a landmark ruling that could potentially reshape the mobile app industry, U.S. District Judge James Donato has ordered Google to overhaul its app store policies. The decision follows a jury verdict in favor of Fortnite maker Epic Games, compelling Google to provide Android users with more options for downloading apps and making in-app payments.

The injunction outlines the changes Google must implement to foster greater competition in its lucrative app store, Play. These changes include making Android apps available from rival sources, a move that could significantly disrupt Google's dominance in the app distribution market.

For three years, Google is prohibited from blocking the use of in-app payment methods that compete with its own. The tech giant is also required to allow users to download competing third-party Android app platforms or stores.

Google's Response and Market Impact

Google has expressed its intention to appeal the verdict that led to the injunction to the San Francisco-based 9th U.S. Circuit Court of Appeals. The company will also request U.S. courts to pause Donato's order pending appeal. Google argues that while these changes may satisfy Epic Games, they could lead to a range of unintended consequences that could harm American consumers, developers, and device makers.

Epic Games CEO Tim Sweeney hailed the order as big news, stating that his Epic Games Store and other app stores will come to Google Play in 2025. He encouraged app developers, store makers, and others to use the next three years to build a vibrant and competitive Android ecosystem that Google cannot stop.

The ruling has had an immediate impact on Alphabet's shares, which closed 2.5% lower at $164.39 on the day of the announcement. To ensure the injunction's implementation and monitoring, Judge Donato ordered the establishment of a three-person technical committee. Epic and Google each get to choose a member, and those two members will select the third person.

The Road to the Injunction

The injunction is set to take effect on Nov. 1, giving Google time to bring its current agreements and practices into compliance. This ruling is the culmination of a lawsuit filed by Epic in 2020, accusing Google of monopolizing how consumers access apps on Android devices and how they pay for in-app transactions.

The Cary, North Carolina-based company successfully persuaded a jury in December 2023 that Google had unlawfully stifled competition through its controls over app distribution and payments. This paved the way for Donato's injunction. Google had urged Donato to reject Epic's proposed reforms, arguing they were costly, overly restrictive, and could harm consumer privacy and security. The judge mostly dismissed those arguments during an August hearing.

This ruling is reminiscent of a similar antitrust case in Washington, where U.S. District Judge Amit Mehta ruled for the U.S. Justice Department, stating that Google had illegally monopolized Web search. Google also began a trial in September in Virginia federal court in a Justice Department lawsuit over its dominance in the market for advertising technology. Google has denied the claims in all three cases.

The ruling is a significant development in the ongoing debate over tech monopolies and their impact on competition. It echoes historical antitrust cases, such as the landmark Microsoft case in the late 1990s, where the software giant was accused of abusing the dominance of its Windows operating system to lock out competition. The outcome of this case could have far-reaching implications for the tech industry and may set a precedent for future antitrust cases.