Alphabet's Google settled for $700 million to satisfy antitrust complaints and enhance Play app store competition. The arrangement was revealed in a San Francisco federal court on Monday, pending judicial approval.
Google will provide $630 million to a consumer fund and $70 million to a state fund under the settlement. Eligible customers will earn $2 and maybe more depending on their Google Play ecosystem spending from August 16, 2016, to September 30, 2023, according to Reuters.
The settlement has the support of all 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands. Through unconstitutional limits on Android app distribution and needless in-app transaction fees, the tech giant was accused of overcharging users.
The Google corporate logo hangs outside the Google Germany offices on August 31, 2021, in Berlin, Germany.
A Landmark Case
Lead plaintiff Utah and several states initially announced the settlement in September, with specific terms kept confidential until the resolution of Google's related trial with Epic Games, the creator of "Fortnite." Recently, a California federal jury sided with Epic Games, determining that aspects of Google's app business exhibited anticompetitive behavior.
Attorneys representing the states praised the settlement terms, asserting they "will offer significant, meaningful, long-lasting relief for consumers throughout the country." They underscored the unprecedented nature of these remedies, claiming that "no other US antitrust enforcer has yet been able to secure remedies of this magnitude from Google or another major digital platform."
As part of the settlement, Google outlined actionable steps, including the expansion of options for app and game developers to provide consumers with alternative billing choices for in-app purchases alongside Play's existing billing system. The company highlighted the successful pilot of "choice billing" in the US for over a year. Additionally, Google committed to streamlining users' ability to download apps directly from developers.
In response to the settlement, Wilson White, Google's vice president for government affairs and public policy, issued a statement emphasizing that the agreement "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."
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In Washington, DC, Attorney General Brian Schwalb celebrated the settlement as a victory for the millions of Americans reliant on Android phones. He asserted, "For far too long, Google's anti-competitive practices in the distribution of apps deprived Android users of choices and forced them to pay artificially elevated prices."
Google and Epic React
Google's vice president, Wilson White, positioned the deal as beneficial for the tech giant, emphasizing its commitment to competition and innovation in the Android ecosystem, as per a report from Fortune. Despite the financial implications and concessions, White stated that the settlement "maintains strong security protections" and allows Google to compete effectively with other software makers.
Epic Games CEO Tim Sweeney expressed dissatisfaction with the settlement, describing it as "an injustice to all Android users and developers." Sweeney criticized the agreement for endorsing what he referred to as Google's "30% monopoly rent imposition" and replacing it with a new "anticompetitive Google-imposed 'user choice billing' tie," which, according to Sweeney, adds a "useless 26% Google Tax for payments they don't process."
The states will ask Judge James Donato for settlement approval on February 8, according to court records. This is the same judge overseeing Epic v. Google, which will be discussed in the second week of January to determine what Epic gained, per The Verge.
Notably, this settlement follows Google's resolution of a smaller lawsuit with app developers in 2022, where the tech giant agreed to a $90 million payout.
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