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Google Agrees to $700 Million Settlement in Antitrust Case over App Store Practices

Google has agreed to pay $700 million and implement minor changes to its app store practices, resolving an antitrust lawsuit with all 50 U.S. states. Critics say the internet giant is only promising to make minor changes to its Android app store as part of the agreement.

The Verge reports that Google’s agreement to pay $700 million marks a significant turn in the ongoing debate about tech giants’ market dominance. This settlement, stemming from antitrust lawsuits filed by 50 state attorneys general, highlights the growing scrutiny over app store practices and their implications for competition and consumer choice.

The jury’s decision on December 11th, 2023, declaring Google’s monopoly in its Google Play app store illegal, paved the way for this settlement. Epic Games, another party fighting an antitrust case against Google, scored a win in this decision. However, the broader implications of the settlement extend far beyond this individual case.

Under the terms of the settlement, Google will distribute $700 million, with $629 million allocated to consumers who may have overpaid for apps or in-app purchases, $70 million to the states, and $1 million for settlement administration. Additionally, Google has agreed to several operational changes over various timeframes, including allowing the installation of third-party apps, offering alternative in-app billing systems, and relaxing exclusivity requirements on app distribution and preloaded app stores.

One of Google’s changes is called “User Choice Billing,” which will allow developers to offer alternative in-app billing systems alongside Google Play’s billing option. This new policy will be in place for the next five years. Additionally, Google will no longer enforce some of the pricing and distribution exclusivity clauses that it used to. While these changes are relatively small, they represent a shift in Google’s approach to app store policies.

However, many of these changes come with expiration dates, and their impact on the app store ecosystem might be limited. Critics argue that the concessions are not substantial enough to alter Google’s market position significantly. The User Choice Billing program, as mentioned in the Epic v. Google trial, provides only a limited choice and does not significantly reduce Google’s control over payments for apps.

 

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