Judge tells Google to prepare for restructuring of Android App Store as punishment for monopoly position

SAN FRANCISCO (AP) — A federal judge indicated Wednesday that he would order sweeping changes to Google’s Android app store to punish the company for developing a system that a jury declared an illegal monopoly and that has harmed millions of consumers and app developers.

During a three-hour hearing in San Francisco, U.S. District Judge James Donato made clear that the upcoming restructuring he is considering will likely include a provision forcing the Google Play Store for Android phones to offer consumers the option to download alternative app stores.

Donato has been considering how to punish Google since December last year, when a jury declared the Play Store a monopoly after a four-week trial. The ruling centered on Google’s near-exclusive control over the distribution of apps for Android phones and the billing systems for the digital commerce that takes place in them – a system that earns the company billions of dollars annually.

In protesting the judge’s possible orders, Google is raising the risk that consumers’ devices could be infected with malware downloaded from third-party app stores, leading to “security chaos.”

But Donato has repeatedly stressed the need for a comprehensive overhaul of the Play Store, even if it could cause headaches for Google and enormous bills that the company estimates could amount to as much as $600 million, depending on the judge’s order.

“We’re going to break down the barriers, that’s what’s going to happen,” Donato told Google lawyer Glenn Pomerantz. “When you’ve built up a mountain of bad behavior, you have to move that mountain.”

Donato said he hopes to issue an order outlining the framework for the Play Store changes in the next few weeks, possibly before 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 “remedial hearings” that will take place in an even larger antitrust case in which a judge also branded the dominant search engine an illegal monopoly. Those hearings, focusing on the crown jewel of Google’s empire, are scheduled to begin in Washington, DC, on September 6.

In the case of the Play Store, Donato is apparently still wrestling with how much time he should give Google to make the changes to its Android operating system and the Play Store, and also with how long the restrictions he imposed should remain in place.

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 led to the Play Store being declared a monopoly, claims Google could do everything in about three months and would have to spend about a million dollars to do it.

Without revealing a timeline he has in mind, Donato indicated that he will not give Google as much time as the company wants to make the necessary changes.

“Google tells me it will take forever for all this to happen, but I’m skeptical,” the judge said. “I doubt all this intelligence can’t solve these problems in less than 16 months.”

Epic Games wants Donato’s orders to remain in effect for six years, but the judge said Wednesday he thinks that proposal is too lengthy. He wondered aloud whether a five-year term for his order might not be more appropriate. Google wants the order to expire after one or two years.

Donato assured Google that he would not try to regulate the company’s business at a micro level, even as he prepared for the company to undergo a profound restructuring.

“It’s about creating a garden of competing app stores,” the judge said.