Google will pay $700 million in Play Store settlement

Alphabet, the parent company of Google, has reached a settlement in an antitrust challenge, agreeing to pay $700 million and implement changes in its Play Store. The settlement, subject to final approval from a judge, includes $630 million for consumers and an additional $70 million for states. 

The legal dispute revolved around accusations that Google operated its app store as an illegal monopoly, allegedly suppressing competition from other app distributors on devices using the Android operating system. The settlement covers a class action lawsuit filed in 2021 and involves all 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands.

Under the terms of the settlement, eligible consumers will receive a minimum of $2, with potential additional payments based on their spending on Google Play between August 16, 2016, and September 30, 2023. 

In September, the lead plaintiff, Utah, along with other states, unveiled the settlement, but the details were kept confidential pending Google’s trial with Epic Games, the creator of “Fortnite.” Last week, a California federal jury sided with Epic, finding certain aspects of Google’s app business to be anticompetitive.

Google initiated a pilot of its user choice billing program in the U.S. in March 2022, allowing developers to utilize alternative payment methods for in-app purchases. As part of the settlement, the company will expand this program, enabling developers to display different purchase costs in the app based on the chosen billing method. 

Google also committed to streamlining the sideloading process, although specific details about the new process were not disclosed. The company emphasized its dedication to informing users about potential risks associated with sideloading and stated that it would update language around these risks. 

“While we maintain it is critical to our safety efforts to inform users that sideloading on mobile could come with unique risks, as part of our settlement we will be further simplifying the sideloading process and updating the language that informs users about these potential risks of downloading apps directly from the web for the first time,” the company said.

The settlement reflects a significant legal outcome for the states, with the states’ attorneys noting “no other U.S. antitrust enforcer has yet been able to secure remedies of this magnitude from Google” or another major digital platform.

As per court documents, the states will seek approval for the settlement from Judge James Donato on February 8th. Judge Donato is also presiding over the Epic v. Google case, and discussions regarding what Epic may have gained in that case are scheduled for the second week of January.