Epic v. Google: Google Searches for Answers in Wake of Permanent Injunction
On October 7, 2024, the District Court for the Northern District of California issued its long-awaited Order for Injunctive Relief and Permanent Injunction against defendant Google in Epic Games, Inc. v. Google LLC. As we discussed almost a year ago when the jury handed Epic its significant victory, the outcome of this case was dramatically different from the parallel Epic Games, Inc. v. Apple Inc., and the resulting injunction is likewise far more encompassing than the one focusing on anti-steering provisions in Apple.
While Google secured a temporary stay of enforcement of the majority of the injunction pending appeal on October 18, this titanic clash is far from over, and an examination of what the injunction does (or rather, will likely do) provides us with some insights into this shifting battleground and what it may mean for the future of the Android—and potentially Apple—marketplace.
What Does the Permanent Injunction Do?
As an initial point, while the jury found that the relevant marketplace for Google’s activity was the entire world except China, the court notably limited the geographic reach of the injunction to just the United States, primarily in deference to other countries’ ability to apply and enforce their own antitrust laws as appropriate. And while the injunction was set to go into effect on November 1, 2024, following the Court’s October 18 temporary administrative stay of most of the injunction’s provisions, the actual date for full enforcement remains uncertain.
The injunction addresses Google’s practices that the jury determined violate federal antitrust laws and California’s UCL, with the goal of remedying those practices over a period of three years. The injunction is very thorough, and includes numerous specific provisions to accomplish this goal, including:
Prohibiting Google from sharing revenues from the Google Play Store with any actual or potential Android app distributors. This is apparently in response to Google’s “Project Hug,” where it paid potential Android app distribution competitors to not compete.
Prohibiting Google from paying or conditioning payment or access to Android app developers on an agreement to first launch their app(s) exclusively on the Google Play Store. Google is also prohibited from paying or conditioning payment or access on an agreement to not launch their app(s) on a third-party Android app distribution platform or to only publish a version of their app(s) with fewer features than those published to the Google Play Store.
Prohibiting Google from conditioning payment or access to original equipment manufacturers or carriers on not preinstalling an Android app distribution platform other than Google Play (note: enforcement of this provision was specifically excluded from the October 18 stay, meaning it is currently in effect).
Prohibiting Google from requiring the use of Google Play Billing in apps on the Google Play Store or preventing app developers from communicating with their users about the availability of other payment options and those options’ pricing. This is akin to the more limited injunction in Apple, which aims to restrain Apple’s “anti-steering” provisions.
Prohibiting Google from preventing Android app developers from providing links to download their app(s) to third-party distributors outside of the Google Play Store.
Requiring Google to permit third-party Android app stores to access the Google Play Store’s catalog of apps, and to permit users to complete the download of Android apps only available on the Google Play Store on the same terms and conditions as if it were downloaded through the Google Play Store.
Prohibiting Google from restricting the distribution of third-party Android app distribution platforms or stores through the Google Play Store, but permitting Google to take “reasonable measures” to ensure security, legality, and adherence to Google’s content standards.
What Happens Next?
Even before the order and injunction was issued, Google vowed to appeal the Court’s decision to the Ninth Circuit, and on October 16 they did just that. While the appeal has been filed, as we laid out in our previous article on this case, Google faces a steep challenge to overturn the jury’s verdict, which requires a stringent showing that the verdict is clearly against the weight of the evidence or that the jury reached a seriously erroneous result—a very high bar in either case. As for appealing the court's entry of a permanent injunction, such decisions are reviewed for abuse of discretion, which may be overturned only if the decision resulted from illogical, implausible, or unsupportable findings. This is also a high bar, and Judge Donato clearly took his time—nearly ten months all told—in crafting the injunction, which does appear closely tailored to the jury’s findings.
Google was successful in moving for a temporary stay of enforcement of the injunction on October 18, but this is potentially a short pause. The Court denied Google’s broader request for a stay pending completion of the appeal, but rather granted only a temporary stay pending the Ninth Circuit’s own resolution of Google’s stay request filed there. It seems likely that the Ninth Circuit will grant its own stay of enforcement until after its decision on the parties’ appeals, which would parallel its decision in the Apple case. A stay of an injunction is an exercise of judicial discretion that is dependent upon the specific circumstances of the case, and courts consider four factors, with the first two being most critical: (1) whether the stay applicant has made a strong showing that they are likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties; and (4) where the public interest lies.
On the first factor, Google will need to show at minimum that there is a substantial case for relief on the merits, but this does not need to rise the level of showing it is likely to win on the merits. We suspect Google will be able to present a compelling—if not ultimately successful—case for relief, especially in light of the opposite outcome in the Apple case. In short, a question of "why Google, but not Apple" might help meet the substantiality requirement for this factor and is something Google is already publicly framing. As for the second factor, Google will need to show there is a probability of irreparable injury if the stay is not granted. Google might argue that permitting the injunction to go into effect before its appeal is resolved could send a previously stable system (the Google Play store and distributions of Android apps) into chaos and potentially expose Google clients to security and privacy risks, something else Google has been arguing for some time. The remaining factors may sway in favor of either party, but as the first two critical factors appear to be in Google's favor, a longer stay of enforcement from the Ninth Circuit seems likelier than not.
Looking even deeper into the horizon, it seems likely that the Supreme Court—which previously denied cert in Apple—may view these two holdings as inapposite and requiring resolution. But such a case may be years down the road from now.
In the meantime, for Android app publishers and developers, we have two practical takeaways of note. First, whether Google is ultimately successful in their appeal or not, there remains a strong possibility that large swathes of the injunction will not be effective for some time, so plan accordingly. Second, even if the injunction is upheld and ultimately enforced, and if Epic’s recent filings in the Apple case alleging that Apple is not in compliance with the permanent injunction are any indication, we expect Google to test the limits of the injunction. For example, while the injunction permits Google to take “reasonable measures” to ensure security, legality, and adherence to Google’s content standards, what exactly a “reasonable measure” may mean in this context is debatable and could lead to further litigation.