Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google has suffered a significant legal blow as a U.S. appeals court upheld a lower court ruling requiring the tech giant to overhaul its Play Store operations.
Court Sides With Epic In Antitrust Showdown
On Thursday, the 9th U.S. Circuit Court of Appeals unanimously rejected Google's arguments to overturn a 2023 jury verdict that found the company engaged in anticompetitive behavior, siding with Fortnite-maker Epic Games, backed by Tencent Holdings (OTC:TCEHY).
Circuit Judge M Margaret McKeown wrote that the case was "replete with evidence that Google's anticompetitive conduct entrenched its dominance." The ruling clears the path for reforms aimed at restoring competition in the Android app market.
Play Store Must Open To Rivals, Says Judge
The original order by U.S. District Judge James Donato mandated Google allow users to download rival app stores within the Play Store and make its app catalog accessible to competitors.
These changes had been on hold pending appeal. The appeals court's decision can still be challenged before the full 9th Circuit or the U.S. Supreme Court.
Epic Games CEO Tim Sweeney celebrated the win, posting on X, formerly Twitter, "Thanks to the verdict, the Epic Games Store for Android will be coming to the Google Play Store!"
Google Warns of Harmful Changes, Plans Further Appeal
In response, Google's VP of regulatory affairs Lee-Anne Mulholland said the ruling "will significantly harm user safety, limit choice, and undermine innovation."
The company plans to continue its appeal process, maintaining that its platform remains competitive and secure, reported Reuters.
Sweeney criticized Google on X, reposting a tweet by Lee Hepner, Senior Legal Counsel at the American Economic Liberties Project, which stated, “Aaaand just like that, Google moves to stay the court’s order pending its appeal to the Supreme Court.”
Hepner accused the tech giant of profiting from delay tactics, adding that Google earns more than $10 billion annually through what he called an “illegal app store monopoly.”
Apple, Google Weren't Competing In App Distribution, Payments: Sweeney
Over the weekend, Sweeney also took to social media to highlight that evidence presented in the Epic v. Google case shows that Google demonstrated little concern about Apple Inc.'s (NASDAQ:AAPL) actions in the realm of app distribution and payment systems via Google Play.
Similarly, Sweeney pointed out that documents from the Epic v. Apple contempt hearing revealed "literally zero" consideration by Apple regarding Google as a competitor in these specific areas.
Sweeney said that while Apple and Google clearly compete in the mobile operating system market, that is not the relevant market under scrutiny in these legal battles.
The focus, he said, is on app distribution and in-app payments—where, based on the evidence, serious competitive considerations between the two companies appear to be absent.
Epic's Billion-Dollar Fight Continues
The decision is part of a broader legal campaign by Epic, which has spent over $1 billion fighting Apple and Google over app store policies. In May, Fortnite returned to Apple's App Store following a related court order, and Epic has proposed dropping all litigation if Apple loosens global restrictions.
Price Action: Alphabet Inc.’s Class A shares declined 2.39% over the past five days, while Class C shares slipped 2.36% during the same period, according to Benzinga Pro.
Despite the dip, Benzinga’s Edge Stock Rankings show that GOOG maintains strong upward momentum across short, medium and long-term timeframes. Additional performance insights are available here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
