Giant tech company Google has agreed to pay the sum of $700 million and make several other concessions to settle allegations that it unlawfully restricted the distribution of apps on Android devices and imposed unnecessary fees for in-app purchase.
As part of the settlement, Google will pay $630m into a settlement fund for consumers and $70m into a fund that will be used by states.
In the settlement, eligible consumers will receive at least $2 and may get additional payments based on their spending on Google Play between 16 August 2016 and 30 September 2023.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
Consumers eligible for a piece of the $630 million compensation fund are supposed to be automatically notified about various options for how they can receive their share of the money. Also, all 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands, will partake in the settlement. Lawyers for the states in their court filing said the settlement terms will offer significant, meaningful, long-lasting relief for consumers throughout the country.
As part of the settlement, Google disclosed that it will implement changes to its Google Play app store to reduce competition barriers for developers, including the ability for apps to charge users directly.
The company said it is expanding the ability of app and game developers to provide consumers with an alternative billing option for in-app purchases next to Play’s billing system. Google added that it piloted “choice billing” in the US for more than a year.
The company’s vice-president for government affairs and public policy Wilson White, said the deal is a positive one for the company, despite the money and concessions it entails. He added that the settlement builds on Android’s choice and flexibility, maintains strong security protections, retains Google’s ability to compete with other operating system makers, and invests in the Android ecosystem for users and developers.
Apart from allegations that it unlawfully restricted the distribution of apps on Android devices, Google faces an even bigger legal threat in another antitrust case targeting its dominant search engine which serves as the centerpiece of a digital ad empire that generates more than $200 billion in sales annually.
The company, which is a key player in the online ad market as well as a dominant force in search ecosystem, is accused of abusing its power in the ad tech market, which coordinates the sale of online advertising space between publishers and advertisers. Google has however denied any wrongdoing in these cases.
The Summary – LinkedIn News
Google parent Alphabet will pay $700 million to consumers and states and make adjustments to its app store to allow for more competition, according to the newly released terms of an antitrust settlement. The agreement resolves claims by a group of states in 2021 that Google Play operated as an illegal monopoly on Android devices. Roughly 102 million consumerscould potentially benefit, with $630 million set out for U.S. consumers and $70 million for a fund used by states. A tentative settlement was announced in September, but terms were not released.
- App developers will also be allowed to charge consumers directly, and Alphabet will make it easier to download apps directly from their sites without using an online store.
- Google is facing several other U.S. antitrust challenges, including federal government claims that it has abused its dominance in online search.
- Alphabet last week lost a case brought by Epic Games alleging it used its position to profit from app developers. Alphabet said it was challenging the verdict. (source)