Google to OEMs: Hey, I know we market Android as an open system, but since we know the market reality is that you can't use other software, we're going to force you into signing these agreements saying no third party app stores and you will bundle our software and telemetry, without giving the option to uninstall. You will also make installing apps from outside the play store show a scary message and requiring changes in the settings.
Google to app providers: Hey, there's a 30% fee on anything both through the play store, and inside your apps once you're done with the play store. Unless we have a secret backroom deal with you giving you an unfair advantage over competing apps, like we've done with Spotify and Netflix.
Courts: Uhhh all of that seems like an abuse of your market position, no?
I don't think including the base store is even a bad thing. I reckon the big change from this will be that if your app is signed as an app store and preinstalled or in turn signed off by Google, the usual safety precautions are dropped and for all intents and purposes you can behave like the Google Store.
Though... I give it ~1-4 minutes until the shitstorm about malware installing their own app stores to get around all security begins. And in this particular content, Epic counts as malware, given the shit they did on PC.
To be able to sell their devices in countries not supported by Google Play (China).
As a leverage to get better licensing deal from google. Manufacturers must pay Google to include Play Store in their device, and it can cost up to $40 per device. By having their own app store, phone manufacturers might have some leverage in licensing cost negotiation (e.g. Google offering them money to not include other app store).
As a similar comparison, Microsoft was found to be in violation of antitrust laws with internet explorer even though everyone could pretty much install any browser they wanted to on Windows.