Google, owned by Alphabet (GOOGL.O), agreed to pay $700 million and permit greater competition in its Play app store under the terms of an antitrust settlement with US states and consumers, unveiled in a San Francisco federal court on Monday, according to Reuters.
Under the agreement, Google will pay $630 million into a settlement fund for consumers and another $70 million into a fund to be used by states. Eligible consumers will receive a minimum of $2 and may earn additional payments based on their spending on Google Play between August 16, 2016 and September 30, 2023.
All 50 states, the District of Columbia, Puerto Rico and the Virgin Islands have joined the agreement.
The company has been accused of overcharging consumers through illegal restrictions on app distribution on Android devices and unnecessary in-app transaction fees.
Utah and other states announced the settlement in September, but the terms remained confidential ahead of Google’s legal battle with Fortnite developer, Epic Games. A California federal jury last week agreed with Epic that parts of Google’s app business were anticompetitive.
Wilson White, Google vice president for government affairs and public policy, stated 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.”
The company claimed it was expanding the ability of app and game developers to provide consumers with an alternative billing option for in-app purchases next to the Play payment system. Google announced that it has been testing “choice billing” in the US for more than a year.
As part of the agreement, Google stated that it would make it easier for users to download apps directly from developers. Lawyers for the states claimed the terms of the settlement “will offer significant, meaningful, long-lasting relief for consumers throughout the country.”
The states’ attorneys declared that “no other US antitrust enforcer has yet been able to secure remedies of this magnitude from Google” or another major digital platform.
Epic has sued for an injunction, but not for monetary damages. Next year, the company is expected to make its own proposal to the judge hearing the case, US District Judge James Donato, about potential changes to the Google Play store.
Epic’s head of public policy, Corie Wright, claimed the states’ agreement “did not address the core of Google’s unlawful and anticompetitive behaviour.” Epic’s CEO, Tim Sweeney, said on social media platform X that the states could have won more damages “if they’d stayed in the fight a few weeks longer.”
Google is facing other lawsuits challenging its search and digital advertising practices, but the company denies any wrongdoing in those cases.
