Google said on Monday that it would pay $700 million to settle a lawsuit filed by a group of U.S. states that accused the internet giant of running a monopoly on its Play Store to inflate prices for paid apps.
The company agreed to pay $630 million into a settlement fund for consumers and $70 million into a fund that will be used by the states, according to the settlement, which still requires a court’s final approval.
The settlement said that 102 million eligible consumers across 50 states will receive at least $2 and may get additional payments based on their spending on Google Play between Aug. 16, 2016 and Sept. 30, 2023.
The company said that app and game developers will now be able to implement an alternative billing option alongside Google Play’s billing system for their U.S. users, “who can then choose which option to use when making in-app purchases.”
Wilson White, Google vice president for government affairs and public policy, stated that the company has been piloting user choice billing in the United States for over a year and will now widen this option.
“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.
“While we are challenging that verdict and our case with Epic is far from over, we remain committed to continually improving Android and Google Play,” he added.
Google was accused of overcharging consumers through unlawful restrictions on the distribution of apps on Android devices and unnecessary fees for in-app purchases. The company has denied any wrongdoing.
Lead plaintiff Utah and other states announced the settlement in September, but the terms were kept confidential ahead of Google’s related trial with “Fortnite” developer Epic Games.
New York Attorney General Letitia James said on Sept. 6 that they filed the lawsuit “because it is illegal to use monopoly power to drive up prices.”
“No company is too big to play by the rules, including Google,” she said.
Epic Games Wins Antitrust Case Against Google
A California federal jury last week ruled in favor of Epic in its lawsuit against Google, determining that Google holds monopoly power in both the Android app distribution and in-app billing services markets.
Epic said the verdict proved that the Google app store’s practices are illegal and that it was abusing its monopoly power to “extract exorbitant fees, stifle competition, and reduce innovation.”
“Today’s verdict is a win for all app developers and consumers around the world,” Epic stated.
Epic sued for an injunction, but not money damages, and the company next year is expected to make its own proposal to the judge hearing the cases, U.S. District Judge James Donato, about potential changes to Google’s Play Store.
According to the game developer, Google imposes a “30 percent tax on developers simply because they have prevented any viable competitors from emerging to offer better deals.”
Epic said the evidence presented in its antitrust case against Google demonstrates “the urgent need for legislation and regulations that address Apple and Google strangleholds over smartphones.”
Mr. White has said that Google is planning to appeal the verdict.
