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Google has settled an antitrust lawsuit over its Google Play payment practices.
The suit, filed in 2021, alleged the Alphabet Inc. unit levied fees up to 30% for app purchases made in its Google Play store. The practice, along with Google Play’s 90% share of all U.S. Android app distribution, prevented consumers from knowing about or using alternative payment methods, the original complaint says.
The settlement, which was reached in September but only surfaced this week, will require Google to pay $700 million to state attorneys general that will be divided into $630 million for consumers and $70 million into a fund for use by states, according to The New York Times. All 50 states and Puerto Rico are part of the suit.
As part of the settlement, Google will not prevent consumers from installing multiple app stores on their Android devices. Google will also make it easier for consumers to download Android apps directly from a developer’s Web site, Wilson White, Google’s vice president of government affairs and public policy, writes in a blog post.
App and game developers will be able to offer an alternative billing option alongside Google Play’s payment service for their U.S. users. “We have been piloting user choice billing in the U.S. for over a year and will now expand this option further,” White says.
Google also will enable developers to communicate freely with customers outside of the app about subscription offers or lower-cost options on a rival app store or the developer’s Web site.
The settlement comes as the prominent app store owners—Google and Apple—face disputes over their payment practices. Apple Inc. found its Apple Pay service, along with Mastercard Inc. and Visa Inc., embroiled in a lawsuit over fee arrangements for the mobile-payment service.
And Google also last week lost a court case Epic Games brought against it over its app-store policies. White says Google was disappointed in that verdict. “While we are challenging that verdict and our case with Epic is far from over, we remain committed to continually improving Android and Google Play,” he says.
The latest development also follows moves by the Consumer Financial Protection Bureau to begin regulating digital wallets, specifically those from Google and Apple. Regulatory pressure to reduce payments fees in these wallets could have a deleterious effect, some consulting services say. “If Google is forced to reduce its cut of payments made through the Google Play store, the market for digital distribution and financial services in digital worlds looks very different,” says a note posted Monday by Javelin Strategy & Research.
