Google will pay millions of U.S. consumers a combined $700 million as part of a settlement with state attorneys general over fees the tech giant charges for use of its app store.
Here Are The Details of The Settlement
Along with a bipartisan group of 52 other attorneys general, Utah Attorney General Sean Reyes announced a $700 million settlement on Tuesday in an antitrust Google Play store suit. The settlement resolves a 2021 lawsuit brought against Google over the alleged abuse of its market dominance by charging exorbitant fees for app creators.
As part of the settlement agreement filed in federal court, Google will pay out $630 million to approximately 102 million U.S. consumers and the remaining $70 million will go to the states that participated in the suit.
As a result, Google will also allow more competition in the Google Play store. The settlement has to still be formally approved by the court.
“The States are fiercely fighting the greed and abuses of certain big tech on multiple fronts,” Reyes said in a press release. “Utah has been a leader and driving force in holding Google accountable for the past ten years. This was evident again on this case as our fantastic AG antitrust was one of the first and loudest advocates for investigating and litigating payments on Google Play.”
The fact that users must use Google Play to purchase apps for their phones was central to the litigation. The states (originally there were 39, but every state, the District of Columbia, Puerto Rico and the U.S. Virgin Islands joined the settlement) alleged that Google used an array of anti-competitive tactics to maintain the store’s dominance.
Among those tactics is that Google takes a 15% to 30% commission on app purchases, a practice, the plaintiffs said, that forces consumers to pay higher prices. “Google collects its 30% cut by forcing consumers to use Google Play Billing to buy apps and in-app content, and by prohibiting app developers from suggesting alternative ways to purchase content,” the motion said.
As part of the settlement, Google will allow users of its Android mobile devices to directly download apps, bypassing the Play Store altogether, Wilson White, Google Vice President of Government Affairs and Public Policy, said in a blog post on Monday.
“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,” White said. “We’re pleased to resolve our case with the states and move forward on a settlement.”
The majority of the settlement – $629 million – will go to Android users who purchased an app on Google Play or used its billing service from Aug. 16, 2016, through Sept. 30, 2023 (the remaining $70 million will go to the participating states). If that applies to you, you’re likely in for a cash deposit, although it’s likely a super small one.
The states’ motion in support of the settlement agreement, filed in San Francisco on Monday, says every eligible customer will get “at least $2,” plus additional payments in proportion to their spending. For the approximately 102 million affected Android users, it’ll likely not be enough to buy a coffee, and even $700 million is a pittance to a company worth $1.7 trillion.
On the bright side, actually getting the money promises to be easy: If an Android owner used the same email address for their Google Play account as a PayPal or Venmo account, the settlement payment will go directly to the payment platform.
Otherwise, customers will get an email suggesting they open up a Venmo or PayPal account or select another payment mechanism, according to the Monday motion.
In the motion, the state attorneys general promise that the payment system will ensure most people get their money. “Because most of the funds will be distributed to Eligible Consumers automatically, the States conservatively expect a 70% distribution rate, which compares extremely well with similar settlements,” the motion said.
