Tens of millions of U.S. consumers will get a payout as Google shells out $700 million to settle an antitrust lawsuit brought by state prosecutors over the high fees it charges app developers.
Google will pay $630 million into a fund that will be divided among an estimated 102 million eligible consumers across all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, according to the settlement terms for Utah et al v. Google that were revealed late Monday. Google will pay an additional $70 million for a fund to be used by the states to resolve other related claims.
“Because of the settlement, Americans are going to see lower prices for apps and greater innovation,” said North Carolina Attorney General Josh Stein, who helped lead the case.
Stein said the states felt they reached a “fair number” after negotiation with Google that would “provide meaningful restitution to consumers across this country.”
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.
State attorneys general hailed the settlement as a victory for consumers. “We brought this lawsuit because it is illegal to use monopoly power to drive up prices and limit consumer choice,” Colorado Attorney General Phil Weiser said in a statement ahead of the filing of the settlement terms.
Wilson White, Google’s vice president of government affairs and public policy, said in a blog post that Google was pleased to resolve the case. “Android and Google Play have continuously evolved,” he said.
The Google settlement is a big-ticket payout, though it comes in under the $725 million that Facebook agreed to pay earlier this year for sharing users’ data without their permission.
According to the settlement terms, an “eligible consumer” for the payout is an individual whose legal address in their Google payments profile was in one of the U.S. states, the District of Columbia, Puerto Rico or the U.S. Virgin Islands when they purchased an app from Google Play or made an in-app purchase, including subscriptions, through Google Play Billing from Aug. 16, 2016, through Sept. 30, 2023.
As part of the terms, Google says it will simplify the process for users to “sideload” apps—or to download them to their phones directly from a developer’s website instead of going through the Google Play store.
The company also agreed to give all app developers the option to allow users to pay through a third-party system instead of Google’s payment system. Google previously required most app developers to use Google’s billing system, which took a cut of up to 30 percent of payments. App makers will now get a four percentage point discount for payments made through third-party billing platforms.
The lawsuit was filed in July 2021 by the attorneys general from 36 states and the District of Columbia. Since then, all other U.S. states have decided to join, as well as Puerto Rico and the U.S. Virgin Islands.
The states argued that Google had used contracts to unfairly close off its Google Play store from competition, leaving app developers with little choice but to accept Google’s high fees.
Google reached the settlement with the states in September. Judge James Donato directed the parties to delay public filing of the settlement terms to avoid influencing a jury trial brought by the video game maker Epic Games against Google over similar issues.
Last week, a San Francisco jury decided in favor of Epic after only a few hours of deliberation. Google says it will appeal.
In a statement after the terms of Google’s settlement were revealed, Corie Wright, Epic’s vice president of public policy, criticized it as “a one-time payout with no true relief for consumers or developers” and said Epic would continue to seek larger changes to Google’s app store in its own case. Wright said the states had originally sought $10.5 billion in antitrust damages.
Google is still facing two other anti-monopoly cases filed by the U.S. Justice Department: one over the practices it uses to dominate the online search market, and the other over its control over the online ads sector. Other major tech companies, including Amazon and Facebook’s parent company Meta, are also battling antitrust cases filed by the Federal Trade Commission. Amazon founder Jeff Bezos owns The Washington Post.