Google has agreed to pay $US700 million ($1 billion) and to allow for greater competition in its Play app store, as part of an antitrust settlement with US states and consumers in a San Francisco federal court. 

The company was accused of overcharging consumers through unlawful restrictions on the distribution of apps on Android devices and unnecessary fees for in-app transactions.

It did not admit wrongdoing.

Like Apple does in its iPhone app store, Google collects commissions ranging from 15 per cent to 30 per cent on in-app purchases — fees that state attorneys-general contended drove prices higher than they would have been had there been an open market for payment processing.

Those commissions generated billions of dollars in profit annually for Google, according to evidence presented in the recent trial focused on its Play Store.

Google will pay $US630 million into a settlement fund for consumers and $US70 million into a fund that will be used by states, according to the settlement, which still requires a judge’s final approval.

The settlement said eligible consumers will receive at least $US2 and may get additional payments based on their spending on Google Play between August 16, 2016 and September 30, 2023.

All 50 states, the District of Columbia, Puerto Rico and the Virgin Islands, joined the settlement.

Lead plaintiff Utah and other states announced the settlement in September, but the terms were kept confidential ahead of Google’s related trial with Fortnite maker Epic Games. 

Epic Games won the antitrust suit it filed against Google three years ago, which found that the internet search giant’s Play Store operated as an illegal monopoly. 

If the ruling holds, it has the potential to give developers more sway over how their apps are distributed and how they profit off them.