Google has agreed to pay $700 million to settle allegations of anticompetitive practices related to its Android app store, Google Play. The settlement was reached with all 50 U.S. states, the District of Columbia, Puerto Rico, and the Virgin Islands. The allegations centered around Google’s practice of forcing developers to use its own payment system for in-app purchases, which charged a commission of between 15% and 30% per transaction. This practice was deemed anticompetitive as there were competing payment systems that charged lower commissions.
The settlement includes $630 million to compensate U.S. consumers who used the payment system within Google’s Play Store, and an additional $70 million to be paid to the states for penalties and other costs. Eligible consumers will receive at least $2, with additional payments depending on their spending on Google Play from August 16, 2016, through September 30, 2023.
In addition to the monetary settlement, Google has agreed to make several changes to its practices. These include allowing developers to implement an alternative billing system, giving developers more flexibility to offer alternative payment choices, and reducing the number of security warnings issued when alternative choices are being used. Apps will also be able to promote lower prices available to consumers who choose an alternate payment system.
The settlement still requires final approval from a judge. The changes agreed upon by Google will be implemented from the date the settlement becomes effective.