Google said on Monday it would allow developers of its Play app store to offer direct payment options to users and would pay $700 million to settle an antitrust lawsuit filed by state attorneys general, in the company's latest move to circumvent greater regulatory scrutiny of their power. .
The lawsuit, filed in July 2021, accused Google's app store of abusing its market power and imposing aggressive conditions on software developers. The tech giant faces several antitrust challenges in the United States, including a lawsuit in which the federal government claims Google has abused its dominance in online search.
In its announcement on Monday, Google said it would now allow apps to charge consumers directly instead of having to charge through Google. The company will pay $630 million to create a settlement fund for consumers, as well as pay $70 million to a fund to be used by states. To highlight the options users have about how to download apps, Google reaffirmed that phone makers, such as Samsung, that use the Android mobile operating system can continue to install multiple app stores on their devices in addition to Google's Play Store.
The deal was announced in September, although no details were released.
Google hopes the deal will serve as a model for resolutions with other critics of its Play Store policies, including Epic Games, the creator of the popular game Fortnite, which won an antitrust lawsuit against Google last week, according to a person familiar with the deal. affair.
“This deal builds on the options and flexibility of Android, maintains strong security protections, and preserves Google's ability to compete with other operating system makers and invest in the Android ecosystem for users and developers,” wrote Wilson White, vice president of government affairs at Google, in a blog post.
The deal is the latest concession from Google regarding its app store, which has come under increased regulatory scrutiny in recent years over accusations of monopolistic behavior. The Google Play Store has drawn complaints because it is one of the two major mobile app marketplaces along with Apple's App Store. Google charges app makers a 15 percent fee on customer payments for app subscriptions and up to 30 percent for purchases made within popular apps downloaded from the store.
In 2021, the South Korean government passed a law forcing Google and Apple to allow app makers to charge customers directly. Google has since offered alternative billing options in the country. It also preemptively introduced a pilot program that gave users the option to choose how they were billed in the United States before the deal took place.
The deal will reduce those fees by four percentage points when app makers handle their own transactions, although consumers won't necessarily see a reduction in fees because app developers could pocket the discount. It will also allow developers to display different pricing options when users make a purchase.
Google settled the government's claims with the attorneys general of all 50 states, as well as Washington, D.C., and Puerto Rico. Had the lawsuit gone to court, the states would have brought their case in a joint lawsuit that would have been heard alongside lawsuits filed by Epic and dating app company Match Group, which had sued on similar grounds.
But Google and the attorneys general announced that they had reached an “agreement in principle” in September, two months before the trial began. The parties had to wait until a week after Epic's verdict to release details of the September settlement.
In October, Google also reached an agreement with Match.
Epic won its case last week, convincing a nine-person federal jury in San Francisco that Google's aggressive taxes and conditions on developers amounted to antitrust violations, harming the gaming company's business prospects. Judge James Donato of the United States District Court for the Northern District of California will decide what remedies are needed to address Google's conduct next year.
Google has said it will appeal the Epic trial verdict. Google's lawyers argued that it was impossible for the company to act as a monopoly because its Android mobile operating system and Play Store compete with Apple's iOS software and its App Store, which is much more popular in the United States.
Apple largely prevailed in a similar lawsuit brought by Epic and decided by a judge, although the US Supreme Court may decide to take up the case next year.
Google's White wrote in the blog post that the company was “disappointed” by last week's verdict, but said the case with Epic was “far from over.”
