We are now learning the details of a settlement reached in September between Google and 50 state attorneys general over antitrust claims about its Play Store, and they are mostly time-limited and minor for Google/Alphabet.
Google is currently trying to fend off antitrust claims on multiple fronts, including from the Justice Department in what is likely to be a landmark case about its search-engine dominance. But it settled one case in September with 50 state attorneys general, led by New York Attorney General Letitia James, concerning the controversial cut that Google takes from all Play Store purchases and app downloads, and its policies regarding third-party app stores.
The suit was brought in July 2021, two years after a coalition of states' attorneys general sued Google over its alleged online advertising monopoly. It claims that Google has been overly aggressive in the terms it imposes on software developers, forcing them into unfavorable deals in order to keep placement in the all-important Play Store.
Just last week, Google lost a similar suit in a jury trial, in a case brought by Fortnite maker Epic Games.
As the New York Times reports, the latest settlement will see Google paying out $700 million to states, with $630 million of that going to create a settlement fund for consumers. The settlement also will allow app-makers, for a limited time, to offer alternative in-app billing systems to users, allowing them to take direct payments without giving Google a 30% cut.
The Verge has the many other terms of the settlement, most of which are time-limited, and as the Verge puts it, "some of it is exceedingly minor." For instance, The Verge points out that the $700 million settlement is equivalent to "roughly 21 days of Google’s operating profit from the app store alone."
The Verge points out that what Google is calling User Choice Billing actually gives app-makers just a 4% discount on their usual 30% cut of in-app purchases.
"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," said Wilson White, Google's vice president of government affairs, in a blog post.
Epic Games CEO Tim Sweeney sees things in a less favorable light, calling this settlement "an injustice to all Android users and developers,” in a tweet.
Sweeney adds that it "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."
While Epic succeeded in winning its case in federal court, Google has pledged to appeal. Google settled a similar antitrust claim with Match in October, and so far Apple has been able to settle similar suits out of court, but the Apple App Store could still see some changes coming as well.
Photo: Pawel Czewinski