The legal battle between Epic Games and Google has taken another significant turn, with the Ninth Circuit Court of Appeals upholding a 2023 jury verdict that found Google’s app store and payment system to be illegal monopolies. This ruling reignites a previously paused permanent injunction that aims to open up the Android ecosystem and dismantle these monopolies.
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The appeals court affirmed the lower court’s decision. Google has confirmed its intention to appeal again. However, this time around, Google faced a tight deadline of just 14 days to begin making changes to its Android app store and business practices. An emergency stay granted by the Ninth Circuit provided at least an extra week, buying Google time to prepare its appeal strategy.
The legal opinion highlights the core issue: the clash between Epic Games, the developer of the popular game Fortnite, and Google’s control over the Android platform. The court emphasized the importance of applying established principles of trial procedure, antitrust law, and injunctive remedies to this case.
The implications of this legal battle extend far beyond the fate of Fortnite. The permanent injunction, if fully enforced, would have a profound impact on the Android ecosystem for at least three years. Google would be required to:
- Distribute rival app stores within the Google Play Store itself.
- Grant competitors access to the complete catalog of Google Play apps.
- Cease a range of anticompetitive practices, including the requirement that apps use Google Play Billing.
Google has expressed strong concerns about the potential consequences of the ruling. According to Google, the decision could significantly harm user safety, limit choices for consumers, and undermine innovation within the Android ecosystem. The company maintains that its top priority is protecting its users, developers, and partners, and ensuring the security of the Android platform as it pursues its appeal.
It’s important to note that the implementation of the injunction won’t be immediate. Judge James Donato initially gave Google eight months to develop a “narrowly tailored” system to ensure Android’s safety and security before the requirement to host rival app stores within the Play Store takes effect. With the stays lifted, Google still has several months to comply, suggesting that a store-within-a-store scenario is unlikely to materialize before 2026.
However, other aspects of the permanent injunction, such as the prohibition on forcing app developers to use Google Play Billing, could be implemented much sooner, potentially within weeks, unless Google secures further stays.
Epic Games initially filed lawsuits against both Google and Apple in 2020, challenging their app store policies after Fortnite was removed from both platforms. Epic strategically used Fortnite to challenge what it perceived as app store monopolies. While Epic’s case against Apple largely failed, the lawsuit against Google has yielded a different outcome.
The appeals court acknowledged Epic’s strategy, noting that Google removed Fortnite from the Play Store after Epic intentionally embedded code that bypassed Google’s payment systems.
The core difference between the Epic v. Google and Epic v. Apple cases lies in the details uncovered during the trial. In the Google case, a jury was presented with evidence of secret revenue-sharing deals between Google, smartphone manufacturers, and game developers. Internal emails among Google executives revealed concerns about Epic’s potential to encourage other game developers to create rival app stores, thereby disrupting Google’s dominance.
The Ninth Circuit rejected the notion that the Apple case should influence the Google case, particularly regarding the crucial issue of market definition – specifically, whether Google could truly hold a monopoly on Android apps given the competition from Apple’s iOS.
The court emphasized that the market definition question was not identical in the two cases. The court also stated the business models of the companies are very different.
Apple’s tightly controlled “walled garden” approach differs significantly from Google’s “open distribution” model. Google itself acknowledges that Android’s open philosophy provides users and developers with greater choices than iOS, even though this openness may limit Google’s ability to directly protect users from malware and security threats. Unlike Apple, Google licenses Android to various smartphone manufacturers, such as Samsung and Motorola.
The court drew an analogy to fast-food chains to illustrate the concept of overlapping markets. While McDonald’s and Chick-fil-A may compete in the overall fast-food market, they may not compete directly in the hamburger-specific fast-food market, where McDonald’s would compete with Wendy’s, Burger King, and other hamburger chains. Similarly, Google and Apple compete for mobile gaming downloads and in-app transactions, but they do not compete in the Android-only app distribution and in-app billing markets.
It is in these two specific markets – Android app distribution and in-app billing – that a jury unanimously concluded that Google holds illegal monopolies.
