Google has agreed to pay $700 million and allow more competition in its Play app store, according to the terms of an antitrust settlement with U.S. states and consumers, New Hampshire Attorney General John Formella announced Tuesday.
Google will pay $630 million into a settlement fund for consumers and $70 million into a fund that will be used by states — including New Hampshire — according to the terms of the settlement, which requires a judge’s final approval.
The settlement said eligible consumers will receive at least $2 and may get additional payments based on their spending on Google Play between Aug. 16, 2016, and Sept. 30, 2023.
All 50 states, the District of Columbia, Puerto Rico and the Virgin Islands joined the settlement.
“This is all about standing up for consumers and small business owners,” Formella said in a statement.
“As technology continues to play a daily role in our lives, we cannot allow an industry giant to illegally use monopoly power to squeeze small businesses trying to compete in digital markets.”
Formella said Google used its dominant position in the market to limit competition and hurt consumers by paying commissions on in-app purchases.
“Google has agreed to modify its business practices in the Play Store,” Formella said. “Our expectation is that this will truly open competition for app stores on Android devices and allow developers to offer cheaper and more competitive pricing of their apps and in-app purchases to consumers.”
People eligible for restitution do not have to submit a claim — they will receive automatic payments through PayPal or Venmo or may elect to receive a check or ACH transfer. More details about the process are expected soon, officials said.
Google was accused of overcharging consumers by placing unlawful restrictions on the distribution of apps on Android devices and levying unnecessary fees for in-app transactions. The company did not admit wrongdoing under the terms of the settlement.
Specifically, the states claimed Google signed anti-competitive contracts to prevent other app stores from being preloaded on Android devices, paid off key app developers who might have launched rival app stores and created technological barriers to deter consumers from directly downloading apps to their devices.
The states announced a settlement in principle on Sept. 5 and released the finalized terms of the deal this week.
Wilson White, Google vice president for government affairs and public policy, said in a statement that the settlement “builds on Android’s choice and flexibility, maintains strong security protections, and retains Google’s ability to compete with other (operating system) makers, and invest in the Android ecosystem for users and developers.”
The settlement requires Google to reform its business practices to:
• Give all developers the ability to allow users to pay through in-app billing systems other than Google Play billing for at least five years;
• Allow developers to offer cheaper prices for their apps and in-app products for consumers who use alternative, non-Google billing systems for at least five years;
• Permit developers to steer consumers toward alternative, non-Google billing systems by advertising cheaper prices within their apps themselves for at least five years;
• Not enter into contracts that require the Play Store to be the exclusive, pre-loaded app store on a device or home screen for at least five years;
• Allow the installation of third-party apps on Android phones from outside the Google Play Store for at least seven years;
• Revise and reduce the warnings that appear on an Android device if a user attempts to download a third-party app from outside the Google Play Store for at least five years;
• Maintain Android system support for third-party app stores, including allowing automatic updates, for four years;
• Not require developers to launch their app catalogs on the Play Store at the same time as they launch on other app stores for at least four years;
• Submit compliance reports to an independent monitor who will ensure that Google is not continuing its anticompetitive conduct for at least five years.
