In an antitrust settlement with US states and consumers revealed in a federal court in San Francisco, Alphabet’s Google has agreed to pay $700 million and enable more competition in its Play app store.
The deal, which is subject to a judge’s final approval, specifies that Google would pay $630 million to a consumer settlement fund and $70 million to a state fund.
Participating in the settlement were all 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands.
Google faced allegations that it illegally limited app distribution on Android smartphones and charged users unnecessary fees for in-app purchases, leading to consumer overcharging.
The contents of the settlement were kept hidden before Google’s related trial with Epic Games, makers of “Fortnite,” which was announced in September by lead plaintiff Utah and several states. Parts of Google’s app business were deemed anticompetitive by a federal jury in California last week, agreeing with Epic.
According to a statement by Wilson White, Google’s VP for government affairs and public policy, the settlement “builds on Android’s choice and flexibility, maintains strong security protections, and retains Google’s ability to compete with other (operating system) makers, and invest in the Android ecosystem for users and developers.”
In addition to Play’s payment mechanism, the company said that it was enabling app and game developers to offer users another option for in-app purchases. Google announced that it had been testing “choice billing” for over a year in the United States.
Google announced as part of the settlement that it will make it easier for customers to get apps straight from developers.
The states’ attorneys said in their court filing that the provisions of the settlement “will offer substantial, meaningful, long-lasting relief for consumers throughout the country.”
To date, “no other U.S. antitrust enforcer has been able to secure remedies of this magnitude from Google” or any other large digital platform, according to the state’s attorneys.
Additional lawsuits are pending against Google, which is being sued for its search and digital advertising tactics. Regarding those cases, Google has denied any misconduct.
Payments to eligible customers will start at $2 and go up depending on their Google Play spending from August 16, 2016, to September 30, 2023, according to the settlement.
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