US Orders Google Android to Open to Competitors' App Stores

Alternatives Must Be Established for Google Play and In-App Payment Systems

Google has been ordered by a U.S. court to allow Android users to make external payments outside of the app store.

On the 8th (local time), Judge James Donato of the U.S. Federal Court in San Francisco, California, ordered Google to allow Android users to use app stores other than 'Google Play' when downloading apps. He also instructed Google to provide alternatives to the 'in-app payment' method, which charges up to a 30% commission when users make payments within apps.

[Image source=Reuters Yonhap News]

Google's revenue-sharing practices were also struck down. It was prohibited to provide incentives to app developers who exclusively launch or first release their apps on the Google Play Store. Additionally, Google can no longer enter into revenue-sharing agreements with mobile device manufacturers such as Samsung and LG to pre-install the Play Store in prominent locations on the home screen or demand blocking the pre-installation of competitors' app stores.

This preliminary injunction follows the court siding with the plaintiff in the antitrust lawsuit Epic Games filed against Google. Previously, Epic Games sued after Google removed 'Fortnite' from the Google Play Store for introducing its own payment system and not allowing competitor app stores to be installed on Android. In December last year, the jury unanimously ruled in favor of Epic Games, stating that "Google illegally monopolized the Play Store and payment services."

Google, expressing its intention to appeal, has also filed a motion to temporarily suspend the court's order. If the order is finalized, it will take effect in November and remain valid for three years. Considering that Google's revenue through the Play Store reached $14.66 billion and $12 billion in 2020 and 2021 respectively, it is expected to significantly impact Google's profitability. On the other hand, developers will be able to bypass Google's commission, which can be as high as 30%, and retain more revenue.

Tim Sweeney, CEO of Epic Games, emphasized, "All app developers, store creators, carriers, and manufacturers have been given three years to build a vibrant and competitive Android ecosystem that Google cannot block," adding, "Since the court's preliminary injunction applies only in the U.S., the legal battle will continue globally."

Meanwhile, on the New York Stock Exchange that day, Alphabet (Class C), Google's parent company, closed at $164.39, down 2.47% from the previous session.