Google has reached a settlement in a case where it was accused of impeding competition on its Android app store. The company will pay $700 million and make additional concessions. This is similar to another ongoing case that may lead to more significant adjustments.

Google made an agreement with state attorneys general in September, but the details of the settlement were not disclosed until documents were filed in a San Francisco federal court on Monday. This revelation occurred a week after a jury in federal court criticized Google for using tactics that hindered competition in its Play Store for Android apps.

The agreement with the states consists of $630 million to reimburse American customers who were directed to use a payment system that state attorneys general claimed inflated the costs of digital transactions on apps obtained from the Play Store. This store specifically caters to Android software, which is used on the majority of smartphones worldwide.

Similar to how Apple operates in its iPhone app store, Google receives commissions ranging from 15% to 30% on in-app purchases. This was contested by state attorneys general who argued that these fees led to higher prices compared to what they would have been in a competitive payment processing market. The evidence presented during the recent trial focused on Google’s Play Store showed that these commissions bring in billions of dollars in profits each year.

Individuals who qualify for a portion of the $630 million restitution fund should receive automatic notification detailing the different methods available for receiving their share of the funds.

An additional $70 million from the pre-trial agreement will go towards covering the fines and expenses that Google is obligated to pay to the states.

Google has also committed to implementing other modifications with the goal of simplifying the process for consumers to access and install Android applications from sources other than its Play Store for the next five years. The company will decrease the number of security alerts or “scare screens” that appear when users opt for alternative options.

App developers on the Android platform will now have more options to provide alternative payment methods to users, rather than being limited to the automatic processing and commission system of the Play Store. Additionally, apps will be able to advertise discounted prices for users who opt for an alternative method of payment outside of the Play Store.

The Attorney General of Washington D.C., Brian Schwalb, praised the settlement as a win for the millions of Americans who use Android phones to organize their daily lives. Schwalb stated, “Google’s unfair actions in app distribution have limited options for Android users and forced them to pay higher prices for apps.”

Google’s VP of government affairs and public policy, Wilson White, described the agreement as a beneficial outcome for the company, despite the financial and other compromises involved. In a blog post, White stated that the settlement not only upholds Android’s options and adaptability, but also upholds robust security measures and allows Google to continue competing with other software developers while investing in the Android ecosystem for the benefit of users and developers.

The settlement was praised by state attorneys general as a significant victory for consumers, but it did not meet the expectations of Epic Games. This company led the charge against Google’s app store policies by filing an antitrust lawsuit in August 2020.

In September, Epic, the creator of the well-known Fortnite game, rejected the agreement and opted to go to court instead. This decision was made even though they had already been unsuccessful in proving their main arguments in a previous trial against Apple’s iPhone app store in 2021.

The Apple trial, though, was decided by a federal judge instead of the jury that vindicated Epic with a unanimous verdict that Google had built anticompetitive barriers around the Play Store. Google has vowed to appeal the verdict.

However, the result of the trial still brings up the possibility of Google being required to pay additional penalties for its previous actions and implementing significant alterations to its profitable Android app ecosystem.

Those changes will be determined next year by U.S. District Judge James Donato, who presided over the Epic Games trial. Donato also still must approve Google’s Play Store settlement with the states.

Google is facing a significant legal challenge in a separate antitrust case focused on its dominant search engine, which is a key component of its digital advertising empire that brings in over $200 billion in revenue each year. The closing arguments for this case, in which the Justice Department is suing Google, are set to take place in early May before a federal judge in Washington D.C.

Source: wral.com