Google Agrees to $700 Million Settlement in Play Store Case

Google will pay $700 million to settle an antitrust suit involving its Play store.

The tech giant announced the settlement Monday (Dec. 18), revealing the details of a September agreement in a 2020 suit by the U.S. government and several states.

Under the terms of the settlement, Google will pay $630 million to a settlement fund for customers, and another $70 million to the states.

“App and game developers will be able to implement an alternative billing option alongside Google Play’s billing system for their U.S. users who can then choose which option to use when making in-app purchases,” Google’s statement reads. “We have been piloting user choice billing in the U.S. for over a year and will now expand this option further.”

The plaintiffs had accused Google of abusing its dominant position in the online search space and hindering competition via its deals with wireless and smartphone companies, which made Google the default search option.

As part of the settlement, eligible customers will receive at least $2 and get “additional payments in proportion to their Google Play spending during the period between August 16, 2016 and September 30, 2023,” the court filing says.

“This settlement builds on Android’s choice and flexibility, maintains strong security protections, and retains Google’s ability to compete with other OS makers, and invest in the Android ecosystem for users and developers,” Google said in its statement.

In a statement to the Washington Post, Washington D.C. Attorney General Brian Schwalb called the settlement a victory for millions of Android users.

“For far too long, Google’s anticompetitive practices in the distribution of apps deprived Android users of choices and forced them to pay artificially elevated prices,” Schwalb said.

Less enthusiastic was Epic Games CEO Tim Sweeney, who recently won a court victory over Google in a similar case, and who called the agreement an “injustice” to Android users.

“The settlement endorses Google’s 30% monopoly rent imposition, by replacing the anticompetitive Google Play Billing tie with a new anticompetitive Google-imposed ‘user choice billing’ tie which adds a useless 26% Google Tax for payments they don’t process,” he wrote on Twitter Tuesday (Dec. 19).

News of this settlement comes a week after a federal jury in California determined that Google’s Play store held a monopoly in the Android app distribution and payments market.

The decision came after a month-long trial and marked a major blow to Google in its ongoing antitrust battle with Epic Games, the game developer behind Fortnite.

Epic sued Google three years ago, charging that the tech giant had monopolized the Android app distribution market through side deals with competitors and had used its resources to stifle competition.

Google maintained that its partnerships aimed to give Android-based phones an edge against their chief competitor, Apple’s iPhone.