Google proposes app store reforms in settlement with ‘Fortnite’ maker Epic Games

Audio By Carbonatix

Enlarge

By Mike Scarcella

WASHINGTON, (Reuters) -Alphabet’s Google has reached a comprehensive U.S. court settlement with “Fortnite” video game maker Epic Games, agreeing to Android and app store reforms aimed at lowering fees, boosting competition and expanding choices for developers and consumers.

In a joint filing on Tuesday in the federal court in San Francisco, the companies asked U.S. District Judge James Donato to consider a proposal resolving Epic’s 2020 antitrust lawsuit, which accused Google of illegally monopolizing how users access apps and make in-app purchases on Android devices.

Google has denied any wrongdoing throughout the closely watched litigation.

The proposal requires Donato’s approval. The judge oversaw a jury trial in 2023 that Epic won and last year he issued a sweeping injunction mandating Play app store reforms that Google said went too far. Google said the reforms potentially harmed its competitive position and compromised user safety.

Under the new proposal, Google would allow users to more easily download and install third-party app stores that meet new security and safety standards.

Developers will also be allowed to direct users to alternative payment methods both within apps and via external web links. Google said it would implement a capped service fee of either 9% or 20% on transactions in Play-distributed apps that use alternative payment options. Those caps apply to apps first installed or updated from Google Play after October 30.

Sameer Samat, Google’s president of Android Ecosystem, said on Tuesday the proposed changes maintained user safety while increasing flexibility for developers and consumers. Samat said Google looked forward to discussing the resolution with Donato, who is expected on Thursday to meet with lawyers involved with the case at a previously scheduled hearing.

Epic Games CEO Tim Sweeney called Google’s proposal “awesome” and said it “genuinely doubles down on Android’s original vision as an open platform.”

Google unsuccessfully challenged Donato’s injunction in a federal appeals court, which upheld it in a ruling in July. The U.S. Supreme Court last month declined Google’s request to temporarily freeze parts of the injunction.

Tuesday’s court filing from Google and Epic asked Donato to modify his injunction, while keeping many parts of it intact. The proposal keeps in place a three-member technical committee to review disputes over implementing the injunction.

The deal if approved by the court would also resolve a separate lawsuit Epic lodged this year against Google and Samsung over app downloads. Epic settled with Samsung in July.

Google faces other lawsuits from government, consumer and commercial plaintiffs challenging its search and advertising business practices. It has denied violating state and federal laws in those cases.

(Reporting by Mike Scarcella; Editing by Muralikumar Anantharaman, Thomas Derpinghaus and Andrea Ricci )