Google to pay $1b in antitrust settlement over Android app store

Google began a pilot program in November last year called user choice billing in partnership with Spotify, which gave users the choice between using Google Play’s billing system or paying Spotify directly to purchase items or subscriptions.

Google said the pilot program would test options for alternative payment methods and gather insights from developers on how it might evolve.

The company has now committed to rolling that option out across the Play Store. Google will also allow developers to steer consumers outside its store to other payment methods.

“The settlement requires Google to give all developers, including game developers, the option to add alternative in-app billing systems for at least five years,” the filings said.

‘Unprecedented’ reaction

All 50 US states, plus the District of Columbia, Puerto Rico and the US Virgin Islands, signed on to the agreement with Google.

The states said Google’s acquiescence was “unprecedented” in antitrust regulation of big tech companies in the US.

“The negotiated terms will offer significant, meaningful, long-lasting relief for consumers throughout the country,” they said in the filings. “No other US antitrust enforcer has yet been able to secure remedies of this magnitude from Google, or, for that matter, from any of the other major digital platforms.”

The settlement requires approval from the California federal judge overseeing the states’ lawsuit, which was filed in 2021.

The same judge, James Donato, is also tasked with deciding what penalties Google should face after a jury found it guilty of breaking antitrust law in the Epic Games trial.

The terms of the settlement with the US states were kept under wraps while the weeks-long trial was under way. Match Group, the owner of dating app Tinder, also settled with Google before a trial.

In addition to the $US700 million payment and the commitment to allow alternative billing options, Google said it would make it easier to download apps on Android devices from sources other than its Play Store, a practice known as “sideloading”.

This would include “updating the language that informs users about these potential risks of downloading apps directly from the web for the first time”, the company’s vice president for government affairs and public policy, Wilson White, said in a blog post.

Critics say such warnings deter consumers from going elsewhere.

Mr White said Google was pleased with the resolution of the case.

“This settlement builds on Android’s choice and flexibility, maintains strong security protections, and retains Google’s ability to compete” with other operating systems, as well as invest in the Android ecosystem, he said.

Epic Games criticised the settlement on Monday, saying consumers would continue to overpay for digital goods under the terms.

“The states’ settlement does not address the core of Google’s unlawful and anti-competitive behaviour,” Corie Wright, Epic’s vice president of public policy, said in a statement.

Google, Mr Wright added, would impose “junk fees” on developers who opted for alternative billing methods to avoid Google’s automatic fee on digital payments.

“In the next phase of the case, Epic will seek meaningful remedies to truly open up the Android ecosystem so consumers and developers will genuinely benefit from the competition that US antitrust laws were designed to promote.”

Epic also took Apple to court over its App Store in 2020, in a case it is now seeking to appeal to the US Supreme Court.

Financial Times