Google’s parent company, Alphabet, has offered to pay $700 million and to make some changes to the Play Store as it tries to resolve the antitrust complaint brought by customers and attorney generals of the 50 US states, which had alleged Google Play Store has an unlawful monopoly over the Android app store market.
In 2021, the US state attorneys general filed a complaint alleging that Google used anticompetitive tactics to prevent competition and ensure that developers are forced to use the Google Play store to reach users.Additionally, Google was accused of inflating Android app prices in a separate class-action suit on behalf of nearly 21 million consumers, alleging that the company takes up to a 30% cut of Play transactions.
Wilson White, who is the Vice President of Government Affairs and Public Policy at Google, in a statement, said the settlement “builds on Android’s choice and flexibility, maintains strong security protections, and retains Google’s ability to compete with other (operating system) makers, and invest in the Android ecosystem for users and developers.”
Google to pay $630 million to customers, $70 million to states
The $630 million out of the $700 million will be put into a settlement fund, which will be distributed to benefit consumers as per a court-approved plan, and will also pay $70 million into a fund used by the states.
Developers can now use alternative billing systems, easier sideloading on Android, and Play Store is no more mandatory
Developers will now have the option to use an alternative billing system to Google Play’s billing option, which will reduce the commission by 4 per cent. The new system has been piloted for over a year in different regions. Developers will also be able to show different pricing options within the app when a user makes a digital purchase.
Google is also simplifying the sideloading process for Android so that users can download apps directly from developers’ websites without the need for the Play Store. It is also changing the language that informs users about the potential risks of downloading apps directly from the web for the first time. “Your phone currently isn’t configured to install apps from this source. Granting this source permission to install apps could place your phone and data at risk,” the new “scare screen” while sideloading an app will read.
Additionally, OEMs can continue to provide users with options to use Play or another app store, and they won’t require Google’s consent before preloading a third-party app store, and they can also choose to skip Play Store altogether. In Android 14, alternate stores will be able to handle and be responsible for future application updates, including automatic update installs that can occur when an app isn’t being used.
The changes will be implemented once the settlement is formally approved by the US District Court, Northern District of California.
Last year, Google paid $90 million to small app developers, settling their antitrust allegations. Google also settled an antitrust case with Match Group, which owns Tinder and Hinge, prior to the trial earlier this year. However, Epic’s antitrust lawsuit went ahead with the trial, which Google lost, as the jury sided with Epic, ruling out the Play Store to be monopolistic. Google has said that it will contest the verdict.
Epic CEO Tim Sweeney weighed in on Google’s settlement offer, writing, “The State Attorneys General settlement is an injustice to all Android users and developers.”
The remedies for the Epic vs Google will be decided in January 2024.