Alphabet, the parent company of Google, has reached a settlement agreement in an antitrust case, disclosing a payment of $700 million. The settlement, unveiled on Monday, allocates these funds to US consumers of Google’s Android app store and state governments.
As part of the resolution, modifications to the Google Play app store will be implemented, aimed at diminishing competition barriers for developers. This includes allowing apps the capability to directly bill users.
Initiated in July 2021, the lawsuit, supported by 37 attorneys general from various US states, accused Google of abusing its power in controlling consumer access to apps on Android-operated mobile devices. The legal action contended that Google employed anti-competitive tactics to dissuade the distribution of Android apps through channels other than its Play store, where commissions are collected through its payment system.
Although the settlement was announced in September, specific details remained undisclosed until recently. Alphabet clarified that $630 million would be directed to a settlement fund for the benefit of consumers following a court-approved plan. Additionally, $70 million will be allocated to a fund for state utilization.
The settlement fund is intended for the distribution of funds to eligible consumers throughout the United States. Those eligible, having made purchases on the Play store between August 16, 2016, and September 30, 2023, are slated to receive a minimum of $2, as per the court-approved settlement. Notably, a key aspect of the settlement allows apps to directly charge Android users for in-app purchases.
Alphabet’s statement elucidated that app and game developers can integrate an alternative billing option alongside Google Play’s system for their US users, offering consumers a choice for in-app purchases.
Beyond the states initially involved in the lawsuit, all 50 states, the District of Columbia, and two territories have joined the settlement. In a separate legal development, Epic Games, the creator of Fortnite, recently secured a significant victory against Google. The court ruled that Google exercises illegal monopoly power through its Android app store.
Alphabet responded on Monday, stating their challenge to this verdict, emphasizing that their legal dispute with Epic is ongoing. Epic Games had previously sued both Google and Apple in 2020, accusing the tech giants of misusing their control over app stores for mobile devices.