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Google agrees $1 billion settlement in suit with consumers and US states

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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.

Wilson White, Google vice-president for government affairs and public policy, said 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 company said it was expanding the ability of app and game developers to provide consumers an alternative billing option for in-app purchases next to Play’s billing system.

Google said it had piloted “choice billing” in the US for more than a year.

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

Lawyers for the states in their court filing said the settlement terms “will offer significant, meaningful, long-lasting relief for consumers throughout the country”.

The states’ attorneys said “no other US antitrust enforcer has yet been able to secure remedies of this magnitude from Google” or another major digital platform.

Epic Games sued for an injunction, but not money damages, and the company next year is expected to make its own proposal to the judge hearing the cases, US District Judge James Donato, about potential changes to Google’s Play store.

In a statement, Epic Games public policy head Corie Wright said the states’ settlement “did not address the core of Google’s unlawful and anti competitive behaviour”.

Mr Wright said Epic Games will press at the next phase of its trial “to truly open up the Android ecosystem”.

Epic Games CEO Tim Sweeney, in a post on social media platform X, said the states could have won a larger damages amount “if they’d stayed in the fight a few weeks longer”.

Google faces other lawsuits challenging its search and digital advertising practices.

It has denied any wrongdoing in those cases. 

ABC/Wires

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