Google to pay $90 mn to settle legal issue with app developers

Alphabet Inc’s Google will pay $90 million to settle a legal issue with app developers, who generate money by creating apps for Android-powered smartphones and for attracting users to make in-app purchases, according to a court filing.
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App developers, in a lawsuit filed in federal court in San Francisco, accused Google of using agreements with smartphone makers, technical barriers and revenue sharing agreements to effectively close the app ecosystem and shunt most payments through its Google Play billing system with a default service fee of 30 percent.

Google said in a blog post it would put $90 million in a fund to support app developers who made $2 million or less in annual revenue from 2016-2021 — as part of the proposed settlement.

A vast majority of U.S. developers who earned revenue through Google Play will be eligible to receive money from this fund, if they choose, Google said in the blog post.

Google said it would also charge developers a 15 percent commission on their first million in revenue from the Google Play Store each year. Google started doing this in 2021.

The court must approve the proposed settlement.

According to estimates, 48,000 app developers are eligible to apply for the $90 million fund, and the minimum payout is $250, according to Hagens Berman Sobol Shapiro, who represented the plaintiffs.

Apple agreed last year to reduce App Store restrictions on small developers, striking a deal in a class action. Apple agreed to pay $100 million.

In Washington, Congress is considering legislation that would require Google and Apple to allow the practice of downloading apps without using an app store. Google says it already allows sideloading. It would also bar them from requiring that app providers use Google and Apple’s payment systems.