Google to pay $700 mn to US consumers, states in antitrust settlement
Alphabet, the parent company of Google, has reached a $700 million settlement in an antitrust case, the details of which were disclosed on Monday. The financial resolution is earmarked for US consumers of Google’s Android app store and state governments.
This development arises from a collaborative lawsuit by dozens of US states, initiated in July 2021, accusing Google of exploiting its influence over consumer access to apps on Android-operated mobile devices.
The lawsuit, supported by 37 attorneys general, alleged that Google engaged in anti-competitive practices to dissuade the distribution of Android apps through channels other than its Play store. Notably, the Play store incorporates a payment system that collects commissions on transactions. In September, a settlement was announced, but the specific terms were not disclosed until now.
Alphabet outlined in a Monday statement that $630 million will be allocated to a settlement fund, subject to court-approved distribution for the benefit of consumers. Additionally, $70 million will be directed to a fund for the states. The settlement fund aims to disburse funds to eligible consumers nationwide who made purchases on the Play store between August 16, 2016, and September 30, 2023, with a guaranteed minimum payout of $2.
Part of the settlement involves modifications to the Google Play app store, intended to alleviate competition barriers for developers. Notably, apps will now have the capability to bill users directly for in-app purchases. Alphabet’s statement emphasized that app and game developers can integrate an alternative billing option alongside Google Play’s system for their US users, granting users the choice of payment method for in-app transactions.
The settlement extends beyond the initiating states, with all 50 states, the District of Columbia, and two territories participating. In a related development, Epic Games, the creator of Fortnite, recently secured a significant victory against Google in a US court. A jury ruled that Google wields illegal monopoly power through its Android app store. Alphabet, however, asserted on Monday that they are challenging this verdict and that their legal dispute with Epic Games is ongoing. Epic Games had sued both Google and Apple in 2020, accusing them of abusing control over their app stores for mobile devices.
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