Alphabet’s Google has confirmed an agreement to pay $700 million and implement measures to foster heightened competition within its Play app store.
The antitrust settlement disclosed at a San Francisco federal court outlines a payment structure of $630 million allocated to a fund for consumers affected by Google’s practices, with an additional $70 million set for utilization by states involved. However, final approval from a judge remains pending for these terms, Reuters news report said.
Eligible consumers, as detailed in the settlement, are slated to receive a minimum of $2, potentially augmented based on their expenditures within the Google Play ecosystem between Aug. 16, 2016, and Sept. 30, 2023.
All 50 states along with the District of Columbia, Puerto Rico, and the Virgin Islands have joined forces in this settlement, raising allegations against Google for excessively charging consumers. The accusations revolve around illegal constraints on app distribution across Android devices and imposing unjustified fees for in-app transactions. Nevertheless, Google has not admitted to any wrongdoing.
The lead plaintiff, Utah, alongside other states, initially announced the settlement in September, maintaining confidentiality regarding the terms until the conclusion of Google’s trial with Epic Games, the maker of “Fortnite.” Last week, a California federal jury ruled in favor of Epic, affirming the anti-competitive nature of segments within Google’s app business.
Wilson White, Google’s vice president for government affairs and public policy, expressed in a statement that the settlement “expands on Android’s freedom of choice and flexibility while upholding robust security measures.” He reiterated Google’s commitment to competing with other operating system makers and investing in the Android ecosystem for users and developers.
Google has also declared plans to enhance app and game developers’ capability to offer consumers alternative billing options for in-app purchases alongside Play’s billing system. This initiative, known as “choice billing,” has been under pilot testing in the U.S. for over a year. Additionally, the company will simplify the process for users to directly download apps from developers as part of the settlement.
Legal representatives for the states emphasized in their court filing that these settlement terms “will provide substantial, meaningful, and enduring relief for consumers nationwide,” asserting that no other U.S. antitrust enforcer has secured remedies of this magnitude from Google or any other major digital platform.
Despite this, Epic Games, while not pursuing monetary damages but an injunction, plans to propose potential alterations to Google’s Play store in the upcoming phase of the trial. The company aims to address what it considers the fundamental issues of Google’s unlawful and anti-competitive conduct, expressing dissatisfaction with the current settlement’s scope.
In a social media post, Epic CEO Tim Sweeney remarked that the states could have secured a larger damages amount “if they’d stayed in the fight a few weeks longer,” hinting at a missed opportunity for a more substantial settlement. Meanwhile, Google faces additional lawsuits challenging its search and digital advertising practices, adamantly denying any wrongdoing in those cases.
