The terms of an antitrust settlement with US states and consumers filed in federal court on Monday state that Google has agreed to pay $700 million and permit more competition in its Play app store.
A total of $630 million in compensation will be awarded to approximately 102 million US consumers as part of the settlement, which ends long-standing claims that Google harmed competition with its app store terms and fees. The dozens of states that took part in the lawsuit will get the remaining $70 million.
As per the settlement terms, the great majority of impacted consumers, or roughly 71.4 million, will be eligible to receive benefits from the agreement without having to submit a claim. Depending on how much they spent through the Google Play Store between August 16, 2016, and September 30, 2023, each eligible customer will receive $2 or more.
Under intense scrutiny regarding its control over the distribution of Android apps and its relationship with independent software developers, the deal has the potential to significantly alter Google’s app store business.
This is in response to a federal jury’s ruling last week that Google’s app store constituted an unlawful monopoly. The outcome of a protracted legal dispute with Epic Games, the creators of the popular video game “Fortnite,” was that verdict. Google is contesting that ruling.
“No company, no matter how large or powerful, is allowed to corner a market and use its influence to overcharge consumers and smother competition,” said New York Attorney General Letitia James, one of the officials involved in the lawsuit. “For too long, Google abused its market share to unfairly raise prices and block developers from selling products in other app stores.”
Along with paying states and customers, Google is also required by the settlement to modify its app store policies in a number of ways for a predetermined amount of time.
For instance, Google consented to extend a pilot programme that gives users the option to pay for in-app purchases using a third-party payment channel or through its in-house billing system for a period of five years.
For over a year, the program—which Google refers to as user choice billing—has been put through extensive global testing. There is a tiny discount available to developers who accept payments via an outside billing system on Google’s costs.
As part of the settlement, app developers will also receive a multi-year guarantee that they can inform users about promotions, alternate payment methods, Google’s commissions, and ways to avoid the company’s fees.
Additionally, Google needs to make it easier for users to install apps from unofficial app stores and third-party websites—a process known as sideloading—including by altering the alerts that Google shows users when they try to sideload.
Although the tech giant does not review software offered outside of its own app store, Google has stated that it supports sideloading in order to promote an open Android ecosystem. However, the company has also warned that sideloading may present security or privacy risks.
The states engaged in the proposed settlement on Monday were originally scheduled to go to trial alongside Epic Games this fall, but they withdrew from the case after revealing the settlement’s existence in September without revealing any of its details. The dating giant Match Group, another prospective plaintiff in the case, withdrew in late October after reaching a settlement of its own with Google.
In a statement, Google expressed its satisfaction with the resolution of the lawsuit filed by the attorneys general, which included representatives from California, Florida, Utah, Washington, the District of Columbia, and other states.
“Android and Google Play have continuously evolved to provide more flexibility and choice in response to feedback from developers and regulators, as well as intense competition from Apple and app stores across the open Android ecosystem,” said Wilson White, Google’s VP of government affairs and public policy. “This settlement builds on Android’s choice and flexibility, maintains strong security protections, and retains Google’s ability to compete with other OS makers, and invest in the Android ecosystem for users and developers.”
Epic Games described the settlement in its own statement, calling it inadequate and weak and stating that it will pursue more “meaningful” penalties when its lawsuit against Google enters the remedies phase.
“After originally seeking $10.5 billion in antitrust damages identified as Google’s unjustly collected fees, the states’ attorneys general settled for a $700 million payout,” said Corie Wright, Epic’s vice president of public policy. “The states’ settlement does not address the core of Google’s unlawful and anticompetitive behavior.”
Google is defending itself in court on a number of fronts, including the disputes surrounding app store practices. In a well-known antitrust case involving the company’s search business, Google went on trial this autumn against the United States government and several states.
According to the lawsuit, Google had abused its market dominance in online search by entering into agreements with smartphone manufacturers and wireless carriers that made Google Search the only or default option on goods that millions of people used, like Apple products.
Google’s advertising technology is the subject of another antitrust lawsuit. According to accusations made by the US government, Google could be breaking the law by monopolising its dominant position in the online advertising market.
CNN
