A federal court jury has decided that Google’s Android app store has been protected by anticompetitive barriers that have damaged smartphone consumers and software developers, dealing a blow to a major pillar of a technology empire. (AP Photo/Peter Morgan, File),
SAN FRANCISCO, CA — Some 102 million U.S. consumers who downloaded Google Play apps are eligible for a share of a $630 million fund the technology giant agreed to establish as part of a larger $700 million antitrust settlement reached with state attorneys general.
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Google struck the deal in September, but the terms of the settlement weren’t revealed until Monday in documents filed in San Francisco federal court. Consumers in the 50 U.S. states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands are entitled to a share of the settlement.
The agreement says consumers who are eligible for the compensation will be automatically notified about their options. Eligible customers will get at least $2, and may be entitled to more based on their Play Store purchases between Aug. 16, 2016, and Sept. 30, 2023, according to the settlement.
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The case centered around the 15 percent to 30 percent commissions collected by Google in its Play Store, which caters to the Android software that powers most of the world’s smartphones.
The attorneys general argued the fees are excessive and that Google drove them higher than they would have if there had been an open market for payment processing. Evidence presented at trial showed the commission charges resulted in billions of dollars in profit annually for Google.
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The settlement agreement was disclosed a week after a federal court jury rebuked Google for deploying anticompetitive tactics in its Play Store for Android apps. Google will also pay an additional $70 million to the states to resolve other related claims.
The company also agreed to make changes to make it easier for Android users to download apps from sources other than its Play Store for the next five years, and to stop issuing security warnings, or “scare screens,” when alternative choices are being used. The agreement gives makers of Android apps more flexibility to promote lower prices, giving customers alternative payment choices so they can avoid the commission-based Play Store.
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Washington, D.C. Attorney General Brian Schwalb hailed the settlement as a victory for the tens of millions of people in the U.S. that rely on Android phones to help manage their lives.
“For far too long, Google’s anticompetitive practices in the distribution of apps deprived Android users of choices and forced them to pay artificially elevated prices,” Schwalb said.
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Despite the money and concessions involved, Wilson White, Google’s vice president of government affairs and public money, framed the deal as a positive for the company. In a blog post, he said the settlement “builds on Android’s choice and flexibility, maintains strong security protections, and retains Google’s ability to compete with other (software) makers, and invest in the Android ecosystem for users and developers.”
Although the state attorneys general hailed the settlement as a huge win for consumers, it didn’t go far enough for Epic Games, which spearheaded the attack on Google’s app store practices with an antitrust lawsuit filed in August 2020.
Epic, the maker of the popular Fortnite video game, rebuffed the settlement in September and instead chose to take its case to trial, even though it had already lost on most of its key claims in a similar trial targeting Apple and its iPhone app store in 2021.
The Apple trial, though, was decided by a federal judge instead of the jury that vindicated Epic with a unanimous verdict that Google had built anticompetitive barriers around the Play Store. Google has vowed to appeal the verdict.
But the trial’s outcome nevertheless raises the specter of Google potentially being ordered to pay even more money as punishment for its past practices and making even more dramatic changes to its lucrative Android app ecosystem.
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Those changes will be determined next year by U.S. District Judge James Donato, who presided over the Epic Games trial. Donato also still must approve Google’s Play Store settlement with the states.
Google faces an even bigger legal threat in another antitrust case targeting its dominant search engine that serves as the centerpiece of a digital ad empire that generates more than $200 billion in sales annually. Closing arguments in a trial pitting Google against the Justice Department are scheduled for early May before a federal judge in Washington, D.C.
The Associated Press contributed reporting.
