Alphabet’s Google has agreed to pay $700 million for greater competition in its Play app store, resolving antitrust claims from US states and consumers. The deal, awaiting final approval from a judge, includes $630 million in consumer compensation and $70 million that states will use. The company will also change its app distribution and billing policies to encourage more developers to compete with the market leader.
The settlement, announced Monday in a San Francisco federal court, settles claims that the tech giant was operating its app store as an illegal monopoly. The dozens of states that brought the case accused Google of stifling competition and overcharging consumers for apps and other purchases made on devices running its Android operating system.
In the settlement, which doesn’t admit wrongdoing, Google will give consumers access to a refund for apps purchased from the Google Play store. It will also reduce app and game prices by allowing developers to show different pricing options when users make digital purchases. It will also simplify users’ ability to download apps, the company said in a statement.
However, the agreement does not resolve other antitrust claims by the US Department of Justice. In particular, the DOJ could still bring a new trial on claims that Google was improperly shutting out competitors in its search and digital advertising businesses.
Google will make changes to its app store to help more developers compete with the market leader, such as allowing them to implement an alternative payment method alongside Play’s billing service. In addition, it will now let developers offer customers discounted subscriptions to their games and expand a program that lets users try out games before they buy them.
The company will also create a fund that will support startups in the Android ecosystem, and it will continue to invest in the platform, which is now used on more than 2.7 billion smartphones and tablets. It will also work with other app stores to improve user experience and developer tools.
The settlement with the US government comes just days after a California jury sided with Epic Games, the maker of the popular online game Fortnite, in a similar lawsuit against Google. In that trial, the jury ruled that certain aspects of Google’s app business exhibited anticompetitive behavior, and it awarded Epic more than $9 billion in damages. The company has denied any wrongdoing in those cases. A hearing next month will determine what remedies the court should impose on Google, Mark Lemley, an attorney who teaches antitrust law at Stanford University, told Bloomberg. That hearing is expected to last about two weeks. The case is the latest in a series of antitrust suits against Google over its dominance in many areas. Earlier this year, a jury found the company guilty of abusing its dominant position in search and digital ads. The company has appealed the verdict in that case.