Google on Monday will allow Play App Store developers to offer direct payment options to users, in the company’s latest move to weather increased regulatory scrutiny of its powers, and will allow developers in the Play App Store to offer direct payment options to users, as well as a lawsuit filed by state attorneys general. announced that it would pay $700 million to settle an antitrust lawsuit. .
The lawsuit, filed in July 2021, accused Google’s app store of abusing its market power and imposing aggressive terms on software developers. The technology giant faces several antitrust challenges in the United States, including a lawsuit in which the federal government claims Google abused its dominance in online search.
Google said in an announcement Monday that apps will now be able to charge consumers directly instead of charging them through Google. The company will pay $630 million to create a consumer settlement fund and $70 million to a fund to be used by states. To emphasize that users have a choice in how they download apps, Google says that phone manufacturers such as Samsung that use the Android mobile operating system will continue to install multiple app stores on their devices in addition to Google’s Play Store. I reconfirmed that it is possible.
The settlement was announced in September, but details were not disclosed.
Google said the settlement would help other companies criticizing its Play Store policies, including Epic Games, the maker of the popular game “Fortnite,” which won an antitrust lawsuit against Google last week. They hope that this will serve as a template for solutions with companies. Case.
“This settlement builds on Android choice and flexibility, preserving strong security protections, preserving Google’s ability to compete with other OS manufacturers, and to invest in the Android ecosystem for the benefit of users and developers. ,” Wilson White, Google’s vice president of government affairs, said in a blog post. post.
The settlement is Google’s latest concession regarding its app store, which has come under increased regulatory scrutiny in recent years over allegations of monopolistic practices. The complaint comes because the Google Play Store is one of his two major marketplaces for mobile apps, along with Apple’s App Store. Google charges app makers a 15% fee on customer payments for app subscriptions and up to 30% on purchases within popular apps downloaded from its store.
In 2021, the South Korean government passed a law for Google and Apple that allows app makers to bill customers directly. Since then, Google has offered alternative billing options in the country. It also preemptively introduced a pilot program that allows users to choose how they would like to be billed in the United States before a settlement occurs.
The settlement will reduce fees for app makers to process their own transactions by 4 percent, but consumers won’t necessarily see the lower fees because app developers will be able to pocket the discount. do not have. It will also allow developers to display different pricing options when users make a purchase.
Google has settled claims with the attorneys general of all 50 states, as well as Washington, D.C. and Puerto Rico. If the case were to go to court, the states would present their claims in a joint trial and would be heard alongside a lawsuit brought by Epic and dating app company Match Group, which sued on similar grounds. That would have happened.
But Google and the attorney general announced in September, two months before the trial began, that they had reached an “agreement in principle.” The parties had to wait until a week after the Epic ruling to announce details of the September settlement.
Google also reached a settlement with Match in October.
Epic won a lawsuit last week, telling a nine-member federal jury in San Francisco that Google’s fees and aggressive terms for developers amounted to antitrust violations and harmed the gaming company’s business prospects. I persuaded him. Judge James Donato of the U.S. District Court for the Northern District of California is expected to decide next year what remedies are needed to address Google’s actions.
Google has announced that it will appeal the Epic trial verdict. Google’s lawyers argued that the company cannot play a monopoly role because its Android mobile operating system and Play Store compete with Apple’s iOS software and the App Store, which is much more popular in the United States. .
Apple nearly won a similar case brought by Epic and decided by a judge, but the U.S. Supreme Court could decide to take up the case next year.
Google’s White said in a blog post that the company is “disappointed” by last week’s ruling, but that the case with Epic is “not over yet.”