Google’s Android Monopoly Cracks as Court Upholds Epic Ruling, Opening Google Play to Competition

TradingKey - On Thursday, July 31, the U.S. Ninth Circuit Court of Appeals rejected Google’s appeal in the Epic Games antitrust case, upholding the lower court’s 2023 ruling that Google illegally maintained a monopoly over app distribution and payment systems on the Android platform. The decision clears the way for the reinstatement of a long-pending injunction, marking the beginning of the end of Google Play’s dominance.

The case originated in August 2020, when Epic Games, the developer of the popular game Fortnite, bypassed Google’s in-app payment system to offer users a cheaper direct purchase option, avoiding Google’s 30% commission. In response, Google removed Fortnite from the Google Play Store, prompting Epic to file an antitrust lawsuit.

For years, Google has enforced “anti-forking agreements” with Android device manufacturers, ensuring that Google Play remains the primary or only app store on most Android devices. Developers were also required to use Google’s in-app payment system, which charged commissions of up to 30% on digital transactions.

In December 2023, a federal jury in California ruled that Google had illegally monopolized the Android app distribution and in-app payment markets, harming competition. However, enforcement of the court’s remedies was put on hold pending Google’s appeal.

Now, with the Ninth Circuit’s decision, that stay is expected to lift. Epic CEO Tim Sweeney said the company will soon be able to launch the Epic Games Store directly on Google Play.

A Major Shift for the Android Ecosystem

According to The Verge, the ruling’s impact extends far beyond Epic. The court order will require Google to:

• Allow third-party app stores to operate freely on Android
• Permit alternative in-app payment systems
• Distribute competing app stores through Google Play
• Grant rivals access to the full catalog of apps on Google Play
• Refrain from imposing anti-competitive restrictions

These changes are expected to take effect over the next three years, fundamentally reshaping the Android app economy.

Google Warns of Security and Innovation Risks

Google responded by stating that the ruling could undermine user security, limit consumer choice, and disrupt innovation that has defined the Android ecosystem. The company emphasized its commitment to protecting users, developers, and partners, and said it is evaluating further legal options while continuing to maintain a secure platform.

On the day of the ruling, Google’s parent company Alphabet (GOOGL) saw its stock fall more than 2%, the second-worst performer among the Magnificent Seven, behind only Tesla, which dropped 3.38%.