In a landmark antitrust settlement made public on Monday, Google’s parent company Alphabet has committed to paying $700 million. The funds will be allocated to US customers of its Android app store and various state governments. The settlement, stemming from a lawsuit filed in July 2021 by 37 attorneys general, addresses accusations of Google abusing its power in controlling consumer access to apps on mobile devices using its Android operating system.
As part of the settlement, Alphabet will implement changes to its Google Play app store aimed at reducing competition barriers for developers. Notably, apps will now have the capability to bill users directly, enhancing flexibility for developers and fostering a more competitive marketplace. The lawsuit alleged that Google engaged in anti-competitive tactics to discourage the distribution of Android apps through channels other than its Play store, where it collects commissions on transactions through its payment system.
The $700 million settlement includes $630 million allocated to a settlement fund for the benefit of consumers, distributed according to a Court-approved plan. An additional $70 million will go to a fund used by the states involved in the lawsuit.
Eligible consumers in the United States who made purchases on the Play store between August 16, 2016, and September 30, 2023, will receive a minimum of $2 from the settlement fund. Moreover, the updated terms allow apps to charge Android users directly for in-app purchases, providing users with more options and fostering a more competitive environment.
“App and game developers will be able to implement an alternative billing option alongside Google Play’s billing system for their US users who can then choose which option to use when making in-app purchases,” the statement from Alphabet explained.
All 50 states, the District of Columbia, and two territories have joined the settlement in addition to the original states that filed the case. Last week, Epic Games, the creator of Fortnite, secured a significant victory against Google when a US jury ruled that the tech giant holds illegal monopoly power through its Android app store. Alphabet, responding to this verdict, stated that they are challenging it, emphasizing that their case with Epic is far from over. Epic Games had sued both Google and Apple in 2020, alleging the abuse of control over their respective app stores on mobile devices.
