Brace for changes in app store as punishment for monopoly: Judge to Google

A federal judge has indicated he will order major changes in Google's Android app store to punish the company for engineering a system that a jury declared an illegal monopoly that has hurt millions of consumers and app developers.

Over the course of a three-hour hearing in San Francisco, US District Judge James Donato on Wednesday made it clear that the forthcoming shake-up he is contemplating will probably include a mandate requiring Google's Play Store for Android phones offer consumers a choice to download alternative app stores

Donato has been weighing how to punish the Google since last December when a jury declared the Play Store a monopoly following a four-week trial. The verdict centred on Google's nearly exclusive control over distribution of apps designed for Android phones and the billing systems for the digital commerce occurring within them -- a system that generates billions of dollars in annual revenue for the company.

 

In protesting the judge's potential requirements, Google has raised the specter of consumers' devices being infected by malicious software downloaded from third-party app stores, triggering security chaos.

But Donato repeatedly hammered on the need for a major overhaul of the Play Store, even if it causes Google headaches and huge bills that the company has estimated could run as high as $600 million, depending on what the judge orders.

We are going to tear the barriers down, that is going to happen, Donato told Google attorney Glenn Pomerantz. When you have a mountain built out of bad conduct, you are going to have to move that mountain.

Donato said he is hoping to issue an order outlining the framework for the changes to the Play Store within the next few weeks, possibly before the Labor Day weekend.

Google's tactics in the penalty phase of the Play Store case may foreshadow its strategy in a similar round of so-called remedy hearings that will be held in an even bigger antitrust case that resulted in a judge branding the dominant search engine as an illegal monopoly, too. Those hearings focused on the crown jewel of Google's empire are scheduled to start Sept 6 in Washington, D.C.

In the Play Store case, Donato still appears to be grappling with how much time he should give Google to make the changes to its Android operating system and Play Store, and also for how long the restraints he imposes should remain in effect.

Google wants 12 to 16 months to make the adjustments to ensure a smooth transition and avoid glitches that could affect the performance of Android smartphones. Epic Games, the video game maker that filed the antitrust lawsuit that resulted in the Play Store being declared a monopoly, contends Google could do everything in about three months at a cost of about $1 million.

Without revealing a timeline he has in mind, Donato indicated he isn't going to give Google as much time as it wants to make the required changes.

Google is telling me it will take eons for all of this to happen, but I am sceptical about it, the judge said. I am dubious that all that brainpower can't solve these problems in less than 16 months.

Epic Games wants whatever Donato orders to remain in effect for six years, but the judge said Wednesday that he thinks that proposal is too lengthy. He wondered aloud if a five-year term for his order might be more appropriate. Google wants the order to expire after one or two years.

Donato assured Google that he isn't going to attempt to micromanage its business, even as he braced the company for a significant shake-up.

The whole point is to grow a garden of competitive app stores, the judge said.