Google to pay £553m in Play Store settlement 

Tech giant agrees to pay settlement and offer greater competition in its Play Store for US consumers

Google has agreed to pay $700 million (£553 million) and make other concessions to settle allegations that it has been stifling competition against its Android app store. 

Although Google struck the deal with US state attorneys general in September, the settlement’s terms were not revealed until this week in documents filed in San Francisco federal court.

This comes a week after Google loses a US monopoly lawsuit against Fortnite maker Epic Games over its app store fees.

The settlement with the states includes $630 million (£497.4 million) to compensate US consumers funnelled into a payment processing system that have been said to drive up the prices for digital transactions within apps downloaded from the Play Store.

Google’s Play Store is the main place where hundreds of millions of people around the world download and install apps that work on smartphones powered by Google’s Android software.

Washington DC attorney general Brian Schwalb hailed the settlement as a victory for the tens of millions of people in the US:

‘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.’

Consumer champion Liz Colls has launched a similar claim on behalf of UK consumers. Colls £920m claim accuses Google of overcharging UK customers for buying apps and making in-app purchases. This case goes to trial in the UK in autumn 2025.

Google fees driving higher prices

Like Apple does in its iPhone app store, Google collects commissions ranging from 15% to 30% on in-app purchases – fees that state attorneys general contended drove prices higher than they would have been had there been an open market for payment processing.

Those commissions generated billions of dollars in profit annually for Google, according to evidence presented in the recent trial focused on its Play Store.

US consumers eligible for a piece of the £630 million (£497.4 million) compensation fund should be automatically notified about various options for how they can receive their cut of the money.

Another $70 million (£55.3 million) of the pre-trial settlement will cover the penalties and other costs that Google is being forced to pay to the states.

Google to offer more app buying choices for US consumers 

Google also agreed to make other changes designed to make it even easier for consumers to download and install Android apps from other outlets besides its Play Store for the next five years.

It will refrain from issuing as many security warnings, or “scare screens”, when alternative choices are being used.

The makers of Android apps will also gain more flexibility to offer alternative payment choices to consumers instead of having transactions automatically processed through the Play Store and its commission system.

Apps will also be able to promote lower prices available to consumers who choose an alternate to the Play Store’s payment processing.

Google views settlement as good for choice and flexibility

Wilson White, Google’s vice president of government affairs and public policy, framed the deal as a positive for the company, despite the money and concessions it entails.

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,’ Mr White wrote in a blog post.

Google loses US monopoly lawsuit against Epic games

Although the state attorneys general hailed the settlement as a huge win for consumers, it did not 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 anti competitive barriers around the Play Store.

Google has said it will appeal the verdict.

But the trial’s outcome nevertheless raises the spectre 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.

Those changes will be determined next year by US district judge James Donato, who presided over the Epic Games trial. Mr Donato also still must approve Google’s Play Store settlement with the states.

Google facing even bigger legal threat to its tech dominance

Google faces an even bigger legal threat in another antitrust case targeting its dominant search engine that serves as the centrepiece of a digital ad empire that generates $283 billion (£228 billion) in sales annually.

Closing arguments in a trial pitting Google against the US Department of Justice are scheduled for early May before a federal judge in Washington DC.