Donato Wasn’t Buying It: Judge Sees Through the Google-Epic "Handshake" Deal
U.S. District Judge James Donato didn't hide his suspicion during a high-stakes hearing on January 22, 2025. Faced with a proposed settlement between Google and Epic Games, the judge looked past the corporate legalese and asked the question that actually matters: Does this deal fix a broken market, or is it just a private truce between two giants?
The proposed agreement, which surfaced after a 2023 jury found Google’s Play Store to be an illegal monopoly, would see Epic Games—the self-appointed champion of "open" app stores—quietly hand Google $800 million over the next six years. Epic’s own CEO, Tim Sweeney, didn't mince words, describing the massive payment as "paying Google off" to finally kill the litigation.
Judge Donato, who spent years presiding over Google’s antitrust sins, appeared blindsided by the revised terms. He signaled that the court isn’t interested in a compromise that waters down the original injunction just to save the litigants more time in court.
The "Payoff" vs. The Public Interest
The irony of the situation was thick in the courtroom. Tim Sweeney has spent half a decade branding Epic as a freedom fighter against the "Google Tax," yet this settlement sees him writing a near-billion-dollar check to the very monopolist he supposedly defeated.
The most glaring omission is "app catalog access." In the heat of the trial, Epic’s expert, Stanford professor Douglas Bernheim, argued that third-party stores need to be able to pull from a centralized catalog to actually compete with the Play Store. This settlement ditches that requirement. Without it, rival stores are essentially trying to build a library one book at a time while Google owns the printing press.
A Watered-Down Injunction?
Independent voices are already sounding the alarm. MIT professor Nancy Rose, providing analysis to the court, warned that these modifications "eliminate important competitive provisions." The concern is that the settlement effectively replaces a court-ordered teardown of Google’s walled garden with a slightly more comfortable cage.
The deal introduces a tiered commission structure—capping rates at 9% or 20% for "registered" stores. While that's better than the standard 30% bite, it creates a "club" system. Smaller developers who don't have Epic's leverage or the "registered" status could find themselves still locked out of the competitive benefits the jury verdict originally promised.
| Feature | The Jury's Intent | The Settlement's Reality |
|---|---|---|
| App Catalog Access | Mandatory for a viable ecosystem | Axed or heavily restricted |
| The "Google Tax" | Breaking the 30% monopoly | Reduced but permanent 9-20% tiers |
| Exclusivity | Banned to allow market entry | Replaced by "service" and "marketing" pacts |
| Interoperability | Open access for all rivals | Limited to "registered" partners only |
What Happens Next
Judge Donato isn't ready to rubber-stamp a private handshake that ignores the public interest. He has demanded additional briefs by February to justify why an $800 million payment and a "marketing arrangement" should be allowed to replace the structural changes the court previously deemed necessary.
For now, the Android ecosystem sits in a holding pattern. The court has a simple choice: accept a settlement that makes life easier for Epic and Google, or hold out for a deal that actually makes life easier for everyone else.