Google has agreed to pay $700 million to settle a lawsuit brought by dozens of states over how it operates its app store.
Alsa Chan, host:
Google is paying $700 million to settle a lawsuit with states over how the tech giant operates its app store. Most of that money is given to people who buy something through Google’s Play Store. Google is also working on changes to the way apps are downloaded and paid on Android smartphones. We hear more from NPR technology correspondent Bobby Allyn. And as a reminder, Google is one of his financial backers of NPR. Hi, Bobby.
BOBBY ALLYN, BYLINE: Hi, Ailsa.
CHANG: Okay. So, wow, $700 million in settlements – what do we know about who will receive this money?
Arin: Yes. The states that filed the lawsuit say most of the money will go to about 100 million people in 50 states who have recently purchased something from the Google Play Store. And, you know, for about 70% of them, they don’t need to do anything. They do not have to file a claim. Google already has your payment information, so your payment will be sent automatically.
Chan: That’s good.
Arin: Of course. right. You may be wondering, “So how much does each person get?” Yes, $700 million is certainly a lot of money, but there are also many people who qualify. It’s unclear exactly how large the eligibility pool will be, including how many people will actually receive a check. But if it’s a luxury item, don’t get too excited, Ailsa, because it might be less than $10.
CHANG: Wan Wan (ph). So why are they getting this money? For example, what is the settlement for?
Arin: Yes. As you mentioned, it’s about the Google Play Store, the way people download and pay for apps on their Android smartphones. And state officials alleged that Google essentially forced everyone to use its own app store, charging up to 30% on some purchases. The states argued that Google maintains high fees because it excludes competition and operates the Google Play Store like an illegal monopoly. So, to resolve the lawsuit, Google agreed to pay a large sum of money and make some changes to the way its app store operates.
CHANG: Wait. hang on. So how exactly will this agreement change Android smartphones?
Allin: Yeah, it will – Android will change in two important ways. First, soon, when someone pays for an app subscription, a small dialog box will pop up with payment options. So either you pay through Spotify or you pay through Google. Previously, Google was the only option. And having a billing option was very important to the state. Next, Google says it will simplify the process of making apps available for download outside of the Google Play Store, making it easier to download them directly from a website.
CHANG: Okay. I’m curious. Why is this happening especially now?
Arin: Yes. It’s important to note that states are pushing these changes because, as you know, the walls are really coming in on smartphone app stores. Of course, these two big companies are controlled by Apple and Google. And there are other major lawsuits against both companies’ app stores. So just last week I was here on ALL THINGS CONDIDERED talking about the jury verdict against Google. Google’s app store was said to be in violation of US law. Regulators in the European Union and South Korea have passed laws mandating changes to the way these app stores operate. And now Google has agreed to these big concessions. But the same problems that plagued the Google Play Store apply to Apple as well.
Chan: Yes. So does this settlement mean anything for iPhone owners like me?
Allin: Yeah, not directly. But in a way, it’s all part of the same story, Ailsa. That means Apple’s App Store is a target for regulators around the world. And while this settlement with the state focuses solely on Google, as you know, these high fees on App Store purchases also apply to Apple. Now, some of the larger forces at play here, in the form of new laws being enacted around the world and increasing legal and regulatory pressure here in the United States, will ultimately force Apple to open the App Store. This may prompt changes in management methods. A few years ago, Fortnite maker Epic Games filed a major lawsuit against Apple, which Apple almost won. The matter is currently on appeal to the U.S. Supreme Court. What do you think it is? You guessed it: Apple’s App Store.
CHANG: NPR’s Bobby Allyn. Thank you, Bobby.
Arin: Thank you, Ailsa.
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