Google has agreed to pay $700 million to settle allegations of stifling competition against its Android app store. The settlement, reached with state attorneys general in September, was disclosed in documents filed in San Francisco federal court. The agreement includes $630 million to compensate U.S. consumers who allegedly faced inflated prices for digital transactions within apps downloaded from the Play Store. Google, like Apple, collects commissions ranging from 15% to 30% on in-app purchases, contributing to billions in annual profits. The settlement also mandates changes to make it easier for users to download Android apps from alternative sources for the next five years. Additionally, Google will reduce security warnings when users choose alternative app sources and allow more flexibility for app makers to offer alternative payment choices to consumers.
The settlement was revealed a week after a federal court jury found Google guilty of deploying anticompetitive tactics in its Play Store. The jury’s verdict rebuked Google’s practices, particularly the fees imposed on in-app purchases, leading to the $700 million settlement. Eligible consumers will receive a minimum of $2, with additional payments based on their spending on the Play Store between August 16, 2016, and September 30, 2023. Google will also pay $70 million to cover penalties and other costs to the states. While state attorneys general view the settlement as a victory for consumers, Epic Games, which filed a similar antitrust lawsuit in 2020, rejected the settlement in favor of a trial, potentially exposing Google to further legal and financial consequences.
The trial’s outcome raises concerns for Google’s Android ecosystem, as U.S. District Judge James Donato, who presided over the Epic Games trial, will determine the changes to be implemented. Google faces additional legal challenges, including an antitrust case targeting its dominant search engine, with closing arguments scheduled for early May before a federal judge in Washington D.C.