Google parent company Alphabet has agreed to pay $700 million and update the Google Play app in order to settle a 2021 U.S. antitrust lawsuit over the Play Store, reports Reuters.
The United States Department of Justice and all 50 states accused Google of charging unnecessary fees for in-app purchases and restricting the distribution of apps on Android devices, resulting in higher fees for consumers.
Google will pay $630 million in restitution to customers, and $70 million into a fund that will be used by states should the settlement get final approval from a judge. Customers who purchased an app on Google Play between August 16, 2016 and September 30, 2023 will receive at least $2.
News of a settlement was announced in September, but the terms were kept under wraps to avoid impacting the Google vs. Epic Games lawsuit. Google lost that lawsuit last week after a nine-member jury unanimously agreed that Google had abused its power by operating an app store monopoly.
In addition to paying money to consumers, Google will make several changes to its Play Store under the terms of the settlement with the government. Developers will be able to pay through in-app billing systems other than Google Play Billing for at least five years, and will be able to direct consumers to non-Google billing systems by advertising cheaper prices in their apps. Google's full concessions are listed below [PDF]:
- Give all developers the ability to allow users to pay through in-app billing systems other than Google Play Billing for at least five years.
- Allow developers to offer cheaper prices for their apps and in-app products for consumers who use alternative, non-Google billing systems for at least five years.
- Permit developers to steer consumers toward alternative, non-Google billing systems by advertising cheaper prices within their apps themselves for at least five years.
- Not enter contracts that require the Play Store to be the exclusive, pre-loaded app store on a device or home screen for at least five years.
- Allow the installation of third-party apps on Android phones from outside the Google Play Store for at least seven years.
- Revise and reduce the warnings that appear on an Android device if a user attempts to download a third-party app from outside the Google Play Store for at least five years.
- Maintain Android system support for third-party app stores, including allowing automatic updates, for four years.
- Not require developers to launch their app catalogs on the Play Store at the same time as they launch on other app stores for at least four years.
- Submit compliance reports to an independent monitor who will ensure that Google is not continuing its anticompetitive conduct for at least five years.
Epic Games CEO Tim Sweeney today shared several tweets decrying the terms of the settlement. He said that it is an "injustice to all Android users and developers," and that the decision "endorses Google's misleading and anticompetitive scare screens."
While Google has agreed to these terms to settle the antitrust lawsuit, Epic Games will also be able to make recommendations for changes to the Play Store as part of its separate lawsuit against Google. Epic Games policy head Corie Wright told Reuters that the ruling "did not address the core of Google's unlawful and anticompetitive behavior" and that Epic Games will push to "truly open up the Android ecosystem" in the next phase of its trial.
Google plans to appeal the decision in the Epic Games case, and the company said it will "continue to defend the Android business model."
Google's settlement and loss in the Epic Games case could have implications for Apple in the future. Apple was successful in its lawsuit against Epic Games, but the company has been ordered to change its "anti-steering" rule that prevents iOS developers from directing users to make purchases outside of the App Store, circumventing Apple's 15 to 30 percent cut of in-app purchases.
Apple and Epic Games have both filed appeals in their dispute, and the Supreme Court will need decide whether to hear the case.
Top Rated Comments
Maybe because they are nothing alike.
Apple is a vertically integrated company, which amongst other things, means they have no duty to deal. Thus, Apple is under no obligation to provide access to companies who refuse to abide by their terms, and the fact remains that Epic violated the App Store terms first. The tradeoff, as we have seen, is that Apple made a conscious decision to give up market share in exchange for a smaller, albeit more profitable, segment of the market. And one that they wield near absolute, unassailable control over.
In contrast, Google was attempting to have their cake and eat it too. They wanted the benefits of an open ecosystem (ie: market share, which would benefit the proliferation of their google services and data collection), but weren't willing to deal with the downsides (eg: allowing third party app stores which would likely lead to a drop in App Store revenue).
It was also not so long ago that critics were certain Apple was "anti-competing" itself into the ground, that they needed to open up or get crowded out by Android. Fast forward 10 years and guess who had the superior business model after all?
My takeaway from all this is that Apple was right, and had always been right.:)
Apple will end up having to open up in some form or another in the near future.