Google to cough up $700mn as part of Play Store antitrust settlement, week after defeat against Epic Games

Tech giant Google's parent company Alphabet has agreed to pay $700 million to settle an antitrust case with US states and consumers filed in federal court on Monday (Dec 18). Of the $700mn, the company will pay $630mn to US consumers and the remaining amount to a fund used by the US states which will benefit 102 million consumers.

The settlement was reached in September but the finer details were made public on Monday with the company adding that it will allow more competition in its Play app store.

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Notably, the complaint highlighted Google’s monopoly over app distribution on Android through the Play Store. All50 states, the District of Columbia, Puerto Rico and the Virgin Islands had joined the settlement and will receive the compensation.

“Each eligible consumer will receive at least $2 and will receive additional payments in proportion to their Google Play spending during the period between August 16, 2016 and September 30, 2023,” Google said in a statement.

As part of the settlement, Google said it would simplify users' ability to download apps directly from developers.

“This settlement builds on Android’s choice and flexibility, maintains strong security protections, and retains Google’s ability to compete with other OS makers, and invest in the Android ecosystem for users and developers,” the company added.

Watch |Epic Games wins major court battle against Google

Google's Epic takedown

Google agreeing to cough up the settlement money comes roughly a week after losing another antitrust trial against Fortnite maker Epic Games.

After years of courtroom drama, the San Franciso jury found that Google struck some deals that stifled competition for its Play mobile app store while violating California and federal antitrust laws.

Epic Games in its 2020 lawsuit alleged that Google struck deals with smartphone makers such as LG and Samsung to pin its app store on home screens, in return for a cut of Google’s profits.

It also said that the tech giant abused its powers to charge excessive fees from app developers, citing Google’s massive operating profit of $12 billion in 2021 alone from Play Store.

Epic CEO Tim Sweeney celebrated the ruling on the social media site X.

In a statement on its website, Epic said that the verdict "proves that Google's app store practices are illegal, and they abuse their monopoly to extract exorbitant fees, stifle competition and reduce innovation."

Wilson White, Google vice president of government affairs and public policy, however, said the company will challenge the verdict and defend the Android business model.

Interestingly, the terms of the $700mn settlement with US states and consumers werekept confidential, despite being agreed in September due to the trial result of the Epic vs Google case.

(With inputs from agencies)