Previously, Epic Games, the developer of Fort Night, filed an anti-monopoly suit against Google Apple against the application store for payment. According to Bloomberg, the United States Ninth Circuit Court formally ruled on Thursday, dismissing Google ‘ s appeal and upholding the lower court ‘ s order for Google Reformer Andre Play ‘ s Google Play policy.
The Directive requires Google to remove restrictions, allow application developers to direct users to the application market of their competitors, and open up payment systems and allow application developers to use independent payment processing systems, rather than imposing the use of Google Play Billing for in-application purchases. This ban on Google was suspended during last year ‘ s appeal and will now come into effect as Google appeals fail.
The Court of Assize, Judge Margaret McKeown, on behalf of the unanimous panel, wrote in its ruling: “The long-established principle is that antimonopoly relief measures can and must normally prohibit otherwise lawful acts in order to eliminate anticompetitive activities that further prevent violators. Within the scope of their remedies, the local courts have the power to demand that Google deal with the victims of its anti-competitive activities.”
Google expressed its disappointment with the decision and warned that it would “significantly compromise user security” and “reduce innovation in the Android operating system”. Lee-Anne Mulholland, Vice President of Google Regulatory Affairs, stated: “Our first task remains to protect users and developers and to ensure the security of the platform while we continue to appeal.”
Chief Executive Officer of Epic Gomes Tim Sweeney praised the ruling on Social Platform X, stating that it would enable Epic to make its Epic Games Store application shop available through Google Play.
The extent to which the reform of Google Play will have an impact on its profits is difficult to quantify precisely, as the Google parent company Alphabet has not separately disclosed the revenues of the store in the financial statements. However, as Mandeep Singh, a Pombo industry research analyst, pointed out last year, the increased use of third-party payment systems by the media and game companies poses a greater threat to Google, even more than the application shops of competitors.
In his analytical report, Mandeep Singh estimated that “in the worst case scenario, this could cause a 20-30 per cent drag on the total sales of some $50 billion in Google’s app store (mainly for subscription services), which, according to our estimates, could lead to a $1 billion to $1.5 billion reduction in gross corporate profits”.
This action also dates back to December 2023, when the jury ruled Epic ‘ s victory, finding that Alphabet had set a restrictive Google Play policy and engaged in anticompetitive behaviour by paying mobile phone manufacturers and popular application developers in exchange for their exclusive use of the application shop. After the ruling, Justice James Donato of the District Court for the Northern District of California ruled last year that Google must make more concessions to its competitors.
In his appeal, counsel argued that the judge should have followed the precedent set by another judge in the 2021 Epic Challenge to Apple Appliance Policy case for the award of apples. However, the Court of Appeal expressly rejected this argument in its opinion on Thursday.
Indeed, in recent years Google has been subjected to increasingly stringent scrutiny by regulators globally for its business behaviour. Previously, federal judges in Washington had ruled that Google had an illegal monopoly on the search and online advertising market and would rule within the next month on how Google must change its online search operations. A federal judge from Virginia will hold a hearing in September to decide whether to enforce Google to sell some of its operations related to online advertising.
This defeat marks a major setback for Google in addressing the regulatory challenges of its core business model in the Andre ecosystem, which could re-establish the global mobile application market.