Google Will Pay $700 Million To Settle Antitrust Suit—And Will Change Play Store Billing

 

Google Play store was the target of an antitrust suit brought by 36 states and the District of Columbia.

KEY FACTS

In a blog post outlining the settlement, Google’s Public Policy and Government Affairs Head, Wilson White, said the company will pay $630 million “to be distributed for the benefit of consumers according to a Court-approved plan.”

Google will also pay $70 million to a fund for use by the states.

In a major change to the Play Store app marketplace on its Android mobile operating system, the company will now allow developers to “implement an alternative billing option alongside Google Play’s billing system” for in-app purchases.

As part of this so-called “user choice billing,” developers will be allowed to show different pricing options within the app itself—something they were only allowed to communicate outside the app previously.

Google added it would simplify the process of sideloading (installing an app downloaded from the web without using an app store) although the company warned this process comes with certain “unique risks.”

Throughout the announcement, White compared the new changes on the Play Store and Android to Apple’s iOS—which he implied is significantly more locked down.

NEWS PEG

Google previously forced app makers to use its proprietary payment system for apps downloaded from the Play Store—one of the two dominant digital marketplaces on mobile alongside Apple’s App Store. Google’s own billing system takes a 15% to 30% cut on all transactions, but “user choice billing” will lower this to between 11% and 26%. The ability to show different pricing options inside the app means users will likely be offered a slight discount for picking the app developers' billing system over Google’s.

KEY BACKGROUND

The changes and $700 million payment are terms of a settlement that Google and the states agreed to back in September. It also follows a jury finding that Google violated U.S. antitrust laws in a case brought against the company by Epic Games and other app developers on the Play Store. Epic’s popular game Fortnite was kicked off Google’s Play Store in 2020 after it tried to implement an external billing option in the game without Google’s permission. Epic and other developers argued that Google and Apple were abusing their dominant position in the mobile phone space to force developers to use their payment solutions that charged a hefty fee.

WHAT TO WATCH FOR

When the settlement was first reported, Epic CEO Tim Sweeney said his company was not party to it. The federal court overseeing the Epic verdict is yet rule on the remedies Google will have to implement and the tech giant has said it plans to appeal the ruling.

CHIEF CRITIC

Sweeney lashed out at the settlement on X, saying: “The State Attorneys General settlement is an injustice to all Android users and developers. It endorses Google's misleading and anticompetitive scare screens, which Google intentionally designed to disadvantage competing stores and direct downloads.”