Alphabet Inc.’s Google lost its appeal of a judge’s order requiring an overhaul of the technology giant’s app store policies in an antitrust case filed by Fortnite-maker Epic Games Inc.

The ruling by the 9th U.S. Circuit Court of Appeals on Thursday means the Google Play store will need to lift restrictions that prevent app developers from setting up rival marketplaces and billing systems. The injunction against Google has been on hold since last year during the appeal.

“It is well established that antitrust remedies can and often must proscribe otherwise lawful conduct to unwind and further prevent violators’ anticompetitive activity,” Judge Margaret McKeown wrote for the unanimous panel. “The district court had within its basket of remedial powers the authority to require Google to deal with parties harmed by its anticompetitive conduct, including its competitors.”

Google said the decision will “significantly harm user safety” and undermine innovation for the Android operating system.

“Our top priority remains protecting our users and developers, and ensuring a secure platform as we continue our appeal,” said Lee-Anne Mulholland, Google’s vice president for regulatory affairs.

Epic Chief Executive Officer Tim Sweeney praised the ruling in a post on X, saying it would enable the company to offer its Epic Game Store through Google Play.

How much the Google Play revamp will affect its bottom line is hard to say because Alphabet doesn’t break out app store revenue separately in earnings.

But increased use of third-party billing systems by media and gaming companies poses a larger threat to Google than rival app stores, Mandeep Singh, an analyst at Bloomberg Intelligence, said in a note last year.

“In a worst case scenario this could be a 20-30% drag on gross app store sales of around $50 billion, mostly subscriptions, which could be a $1-$1.5 billion drag on the company’s gross profit, based on our estimates,” Singh said.

In December 2023, a jury sided with Epic on its claims that Alphabet set restrictive Google Play policies and engaged in anticompetitive conduct by paying phone manufacturers and popular app developers to exclusively use its app store. Following the verdict, U.S. District Judge James Donato in San Francisco ruled last year that Google must be more accommodating to rivals.

Google lawyers had argued on appeal that Donato should have followed the lead of another judge who ruled against Epic in 2021 in its challenge to Apple Inc.’s app store policies. The appeals court rejected that argument in its opinion Thursday.

The Google-Epic antitrust battle has played out as the technology giant faces increased scrutiny over its business practices from regulators across the world.

A federal judge in Washington is set to rule in the next month on how Google must change its online search business after finding the company illegally monopolized search and advertising markets. And a Virginia federal judge in September will hold a hearing on whether to force the company to sell of some of its business related to online display advertising.

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