Google, Epic Games Settle Long Legal Fight Over App Store (1)

Google and Epic Games Inc., maker of the popular Fortnite game, reached a settlement in their five-year antitrust fight over how developers distribute and monetize apps on Android phones, according to a court filing.

The exact terms of the agreement weren’t disclosed, but the accord comes as the Alphabet Inc. unit had already begun making major court-ordered changes to its Google Play store that would open it up to outside competition. It faces a series of deadlines over the coming months after failing to win relief from the US Supreme Court.

The companies told the judge presiding over their court battle that they want to modify the order he imposed on Google.

A jury sided with Epic in December 2023 over its claims that Google engaged in anticompetitive conduct by paying phone manufacturers and popular app developers to exclusively use its app store. Following the verdict, US District Judge James Donato in San Francisco ruled last year that Google must be more accommodating to rivals.

The judge banned preferential treatment for Google services on Android phones and required the company to let mobile app developers steer customers to lower payments outside of the Play Store. He also ordered Google to make its app catalog available to rival app stores so that they can better build a competing product.

Under the settlement, much of what Donato ordered will still apply, with some key differences. That includes caps on commissions Google can charge for purchases outside the Play Store of 9% or 20%, depending on the type of transaction and the date on which the app was installed. The settlement also nixes app catalog access in favor of “registered app stores” that will be given equal treatment to the Play Store on devices using Google’s Android operating system.

“At the court’s prompting, the parties have engaged in several rounds of negotiations, over several months, involving their most senior executives,” the two companies said in their joint court filing. “The parties have agreed to resolve their disputes with a settlement that both parties believe will advance the evolution of the Android platform.”

The settlement would also resolve related litigation between Epic and Samsung Electronics Co., according to the court filings.

Sameer Samat, head of Android at Google, said in a post on X that the settlement will “focus on expanding developer choice and flexibility, lowering fees, and encouraging more competition all while keeping users safe.”

Donato is holding a hearing Thursday to discuss the latest developments in Epic’s suit against Google as well as other related cases including a consumer class action and a pending settlement with dozens of state attorneys general.

“Google has made an awesome proposal,” Epic Chief Executive Officer Tim Sweeney said in his own post on X. “It genuinely doubles down on Android’s original vision as an open platform.”

(Updates with more detail on the settlement and an upcoming hearing starting in the sixth paragrah.)

To contact the reporter on this story:
Josh Sisco in San Francisco at jsisco6@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Peter Blumberg

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