Google Settles Antitrust Case For $700 Million Over Play Store Practices

Google has agreed to a $700 million settlement in an antitrust lawsuit led by US states, challenging the company's competitive practices in its Android app store.

What changes will Google make in Play Store after the antitrust settlement?

Google has settled a major case, in a resolution that has been described as "unprecedented" in US antitrust regulation.

The settlement, initially reached in September and announced this Monday, follows a recent legal victory by Epic Games against Google. Under the terms, Google will allocate $630 million to a consumer fund and $70 million to a state fund. This resolution comes after allegations that Google restricted competition to its Play Store through exclusive contracts with smartphone makers, network operators, and developers. The company was accused of imposing excessive fees on digital purchases in the Play Store by limiting alternative payment methods.

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Commitment to Change And Developer Flexibility

As part of the agreement, Google has committed to significant changes in its Android system operations in the US. This includes introducing alternative billing methods for in-app purchases and allowing developers more freedom to direct consumers to other payment options. Google's pilot program with Spotify, initiated in November last year, tested such alternative payment methods. Now, the company plans to extend these options across the Play Store, a move that marks a considerable shift in its approach to app sales and developer relations.

The agreement involves all 50 US states, along with the District of Columbia, Puerto Rico, and the US Virgin Islands. This settlement is seen as unprecedented in US antitrust regulation, especially concerning Big Tech companies. The deal, which requires approval from California Federal Judge James Donato, signifies a major step in addressing antitrust concerns. Judge Donato is also overseeing penalties for Google in the Epic Games trial, highlighting the broader legal challenges the tech giant faces.

Alphabet Inc. price chart
The market shows no interest in the settlement. Google is paying it out of petty cash.

Additional Settlement Provisions And Reactions

Apart from the financial aspect, Google has also pledged to facilitate the downloading of apps from sources other than its Play Store, addressing the practice of sideloading. This includes revising user warnings about potential risks associated with downloading apps from the web. Despite these commitments, the settlement has faced criticism from Epic Games, who argue that it doesn't adequately address Google's anti-competitive behavior and the impact on digital goods pricing. As the legal proceedings continue, Epic Games is poised to seek further remedies to open up the Android ecosystem, emphasizing the need for competition as envisioned by US antitrust laws.

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