Google says it will pay $700M as a part of Play Store dispute settlement

Google said today it will pay $700 million — $630 million to U.S. consumers and $70 to a fund used by U.S. states — in a settlement over Play Store reached in September.

In September,  the company reached a tentative settlement in a class action lawsuit filed by U.S. states and consumers originally filed in 2021. However, the search giant made the details of the settlement public today. The complaint highlighted Google’s monopoly over app distribution on Android through the Play Store.

In November 2022, Google started a pilot of its user choice billing program in the U.S., which allowed developers to use alternative payment methods for in-app purchases. Today, the company said it will expand the program in the country as part of the settlement. Google said that developers will be able to show different costs of a purchase in the app based on the billing method chosen by the customer.

The company also said that it would make the sideloading process streamlined. However, it emphasized that the company will alter messaging around sideloading.

Currently, users see a pop-up with warning text when they try to sideload an app. This pop-up then takes users to a settings screen where they can install apps from “unknown sources.” Google will have to combine both these screens as part of the settlement. The agreement states that the company will have to maintain this flow of sideloading for at least five years without altering it.

“While we maintain it is critical to our safety efforts to inform users that sideloading on mobile could come with unique risks, as part of our settlement we will be further simplifying the sideloading process and updating the language that informs users about these potential risks of downloading apps directly from the web for the first time,” said Wilson White, VP, Government Affairs & Public Policy at Google.

Google pointed out in its blog post that Android 14, also made the app upgrade process easier with more controls for third-party app stores via an API.

This development at the time Google lost its antitrust battle with Epic. Google plans to appeal the verdict and reiterated in today’s blog post that it “didn’t recognize the choice and competition that our platforms enable” but the case is “far from over.”

The trial unearthed Google’s deals with companies like Spotify, which paid no commission on Play Store for in-app purchases.

The Epic v Google, trial showed that the search company knows that a 4% discount offered through the user choice billing is not enough for developers to switch to other operators. Because developers will also need to pay fees to those processors, which might be more than the 4% Google is offering.

In reaction to Google’s settlement with the State Attorney General, Corie Wright, Vice President of Public Policy at Epic Games said that this payment will bring “no true relief” to consumers.

“Consumers will continue to overpay for digital goods as a result of Google’s imposition of supracompetitive 30% fees for Google Play Billing or 26% junk fees on top of payments Google isn’t involved in processing. Developers will also continue to be restricted in how they distribute their apps, and developers who choose to use a third-party payment option will be forced to use Google’s deceptively labeled “user choice billing” system rather than having creative freedom over the design of their payment systems,” Wright said in a statement.

Epic added in a blog post that in the next phase of the case with Google, the games company will hunt for “meaningful remedies to truly open up the Android ecosystem.”