Google allows more app payment options in antitrust deal with states
Google said Monday it will allow developers on its Play app store to offer direct payment options to users and will pay $700 million to settle an antitrust lawsuit brought by state attorneys general, the company's latest moves. has to navigate increased regulatory scrutiny of his power. ,
The lawsuit, brought in July 2021, accused Google's App Store of abusing its market power and imposing aggressive terms on software developers. The tech giant is facing several antitrust challenges in the United States, including a trial in which the federal government claims Google abused its dominance in online search.
In its announcement on Monday, Google said it will now allow apps to charge consumers directly instead of charging them through Google. The company will pay $630 million to create a settlement fund for consumers, plus $70 million into the fund to be used by states. To highlight the options users have for how to download apps, Google confirmed that phone makers like Samsung, which use the Android mobile operating system, will be able to install multiple app stores on their devices in addition to Google's Play Store. Can continue.
The agreement was announced in September, although details were not released.
Google hopes the settlement will serve as a template for settlements with other critics of its Play Store policies, including Epic Games — maker of the popular game Fortnite — which won an antitrust lawsuit against Google last week. Was, according to a person familiar. Case.
Wilson White, Google's vice president of government affairs, wrote, “This agreement builds on the choice and flexibility of Android, maintains strong security protections, and provides an opportunity to compete with other OS makers and invest in the Android ecosystem for users and developers.” “Retains Google's potential.” a blog post,
The agreement is Google's latest concession regarding its App Store, which has come under regulatory scrutiny in recent years over claims of monopolistic behavior. The Google Play Store has received complaints because it is one of the two main marketplaces for mobile apps along with Apple's App Store. Google charges app makers a 15 percent fee for customer payments for app subscriptions and up to 30 percent for purchases made within popular apps downloaded from the Store.
In 2021, the South Korean government passed a law forcing Google and Apple to allow app makers to charge customers directly. Since then, Google has offered alternative billing options in the country. It also previously introduced a pilot program that offered users the option to bill them in the United States before the settlement took place.
The settlement will reduce those fees by four percentage points when app makers handle their own transactions, though consumers won't see a fee reduction because app developers can get rebates. It will also allow developers to show different pricing options when users make a purchase.
Google settled government claims with the attorneys general of all 50 states, as well as Washington, DC and Puerto Rico. If the lawsuit had gone to court, the states would have presented their case in a joint lawsuit, which would have been heard along with lawsuits filed by Epic and dating-app company Match Group, which had filed suit on similar grounds.
But Google and the attorney general announced they had reached an “agreement in principle” in September, two months before the trial was scheduled to begin. The parties had to wait until a week after the epic decision to release details of the September settlement.
In October, Google also reached a deal with Match.
Epic won its case last week, convincing a nine-member federal jury in San Francisco that Google's levies and aggressive terms on developers amounted to antitrust violations, hurting the gaming company's business prospects. Judge James Donato of the US District Court for the Northern District of California will decide next year on what measures are needed to address Google's conduct.
Google has said it will appeal the decision in the Epic trial. Google's lawyers argued that it is impossible for the company to act as a monopoly because its Android mobile operating system and Play Store compete against Apple's iOS software and its App Store, which is much more popular in the United States. .
Apple largely won a similar suit brought by Epic and the ruling was overruled by a judge, although the US Supreme Court may decide to take up the case next year.
Google's Mr. White wrote in a blog post that the company was “disappointed” by last week's decision, but said the case with Epic “is not over yet.”