KEY HIGHLIGHTS
- $700 Million Settlement: Google agrees to pay $700 million to settle antitrust allegations brought by state attorneys general over its Android app store practices.
- Policy Changes: Google will modify Google Play store policies, allowing developers to bypass the 15-30% commission and charge consumers directly.
- Antitrust Allegations: The settlement addresses accusations of Google unlawfully dominating the Android mobile applications market and overcharging consumers.
- Compensation for Consumers: Of the $700 million, $630 million will be distributed to compensate consumers, with eligible users receiving at least $2 and potential additional payments based on their spending.
- Alternative App Download: Google will permit users to download apps directly from developers, bypassing the Google Play Store, and allow developers to display different pricing options.
- Ongoing Antitrust Challenges: Google still faces antitrust challenges, including a Department of Justice lawsuit over alleged anticompetitive practices in its search engine business.
- Unintentional Disclosure: The disclosure of Google paying Apple 36% of Safari search revenue raises eyebrows, causing a visible reaction from Google’s lawyer during the antitrust trial.
Settling the Antitrust Suit: Google’s $700 Million Payout
A week following Google’s legal setback in an antitrust trial against Epic Games, the tech giant has revealed the terms of its settlement in a significant 2021 lawsuit initiated by state attorneys general concerning its app store practices.
In the antitrust suit, it was alleged that Google unlawfully held dominance in the Android mobile applications market and overcharged consumers. On Monday, the company announced its agreement to pay $700 million and revise its policies on the Google Play app store. The revisions will now permit developers to bypass Google, which traditionally levied a commission ranging from 15 to 30%, and directly charge consumers.
The settlement, disclosed in documents filed in San Francisco federal court, was reached with state attorneys general back in September but details were only made public late Monday. This revelation followed a federal court jury’s recent censure of Google for employing anticompetitive tactics within its Play Store for Android apps.
As part of the settlement with the states, $630 million will be allocated to compensate U.S. consumers impacted by a payment processing system alleged to have inflated prices for digital transactions within apps from the Play Store. The Play Store is a hub for Android software, powering a majority of the world’s smartphones. Eligible consumers are set to receive a minimum of $2, with potential additional payments based on their spending within the Play store between August 16, 2016, and September 30, 2023.
Out of the $700 million settlement fund, $630 million will be distributed to consumers following a court-approved plan, while the remaining $70 million will be dispersed to the states.
Expanding User Freedom: Google’s New App Download Policies
In a further development, Google has committed to allowing users to download apps directly from developers without relying on the Google Play Store. The company also announced that developers will have the freedom to display varied pricing options to consumers.
Despite this settlement, Google faces ongoing antitrust challenges not confined to its app store. The company is currently contending with a Department of Justice suit accusing it of anticompetitive practices related to its search engine business.
A noteworthy revelation during this legal saga was Google’s inadvertent disclosure that it paid Apple 36% of its Safari search revenue to uphold its position as the default search engine on Safari. This revelation prompted visible discomfort from Google’s legal representative.
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Source(s): Business Insider; AP News
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