Alphabet’s Google has reached an agreement to pay $700 million and enhance competition within its Play app store, as part of an antitrust settlement with US states and consumers revealed on Monday in a federal court in San Francisco.
As per the terms of the settlement, the company will contribute $630 million to a fund for consumers and $70 million to a fund for states, pending final approval from a judge. The settlement specifies that eligible consumers will receive a minimum of $2, with the possibility of additional payments based on their expenditures on Google Play between August 16, 2016, and September 30, 2023.
All 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands have participated in this settlement. Google faced allegations of overcharging consumers due to unlawful restrictions on app distribution on Android devices and unwarranted fees for in-app transactions. While not admitting wrongdoing, the company agreed to the settlement.
The lead plaintiff, Utah, and other states initially announced the settlement in September, with the terms kept confidential until after Google’s trial with Epic Games, the maker of “Fortnite.” A California federal jury recently sided with Epic, finding certain aspects of companies’ app business anticompetitive.
Wilson White, Google’s vice president for government affairs and public policy, stated that the settlement builds on Android’s flexibility, maintains security measures, and allows the company to compete in the operating system market while investing in the Android ecosystem.
Google is expanding options for app and game developers to offer an alternative billing system
As part of the settlement, Google is expanding options for app and game developers to offer an alternative billing system for in-app purchases alongside Play’s billing system. The company mentioned the successful pilot of “choice billing” in the US for over a year.
Google also committed to simplifying users’ ability to download apps directly from developers. In a court filing, attorneys for the states asserted that the settlement terms would provide significant and lasting relief for consumers nationwide, highlighting the magnitude of remedies obtained from the company compared to other US antitrust enforcers.
Epic, which sought an injunction rather than monetary damages, expressed dissatisfaction with the states’ settlement, claiming it did not address Google’s core anticompetitive behavior. Epic plans to pursue changes to Google’s Play store in its upcoming proposal to the judge overseeing the cases, US District Judge James Donato.
Epic CEO Tim Sweeney, in a social media post, suggested that the states could have secured a larger damages amount if they had prolonged their legal battle with the company. Despite this settlement, Google continues to face legal challenges related to its search and digital advertising practices, maintaining its denial of any wrongdoing in those cases.