Google is to pay a whopping $700 million Play Store dispute settlement according to the terms of an antitrust case with U.S. states and consumers reached in September 2022.
All 50 US states, the District of Columbia, Puerto Rico and the Virgin Islands, were joined in the settlement in which Google was accused of overcharging consumers through unlawful restrictions on the distribution of apps on Android devices and unnecessary fees for in-app transactions.
Despite the best company not admitting to any wrongdoing, Google will pay $630 million into a settlement fund for consumers and $70 million into a fund that will be used by states with eligible consumers to receive at least $2 and likely additional payments based on their spending on Play Store between August 16, 2016 and September 30, 2023.
The terms of the settlement weren’t revealed until late Monday in documents filed by the concerned states in a San Francisco Federal Court. The settlement, which still requires a judge’s final approval, will also see minor concessions granted consumers in the way Google runs its store in the United States.
Google has also agreed to make other changes designed to make it easier for consumers to download and install Android apps from other outlets besides its Play Store for the next five years with Android apps makers also to gain more flexibility to offer alternative payment choices to consumers instead of having transactions automatically processed through the Play Store and its commission system.
Apps will also be able to promote lower prices available to consumers who choose an alternative to the Play Store’s payment processing. The states wrote in a court filing late Monday that they estimate at least 70 percent of eligible consumers, or 71.4 million people, will receive automatic payments without having to file a claim.In a reaction to Google’s settlement with the State Attorney General, Vice President of Public Policy at Epic Games, Corie Wright, stated that the payment will bring “no true relief” to consumers.
“Consumers will continue to overpay for digital goods as a result of Google’s imposition of supracompetitive 30% fees for Google Play Billing or 26% junk fees on top of payments Google isn’t involved in processing”, he said.
In separate complaints, the Justice Department and dozens of states had accused Google in 2020 of abusing its dominance in online search by allegedly harming competition through deals with wireless carriers and smartphone makers that made Google Search the default or exclusive option on products used by millions of consumers. The complaints eventually consolidated into a single case.
Philips Babatunde