Google parent Alphabet agreed to pay $700 million and make certain changes to its app store, settling one of several antitrust challenges to the search-engine company, The Wall Street Journal reported.
The settlement resolves claims by a group of states that Google operated its app store, Google Play, as an illegal monopoly, allegedly stifling competition from other app distributors using the Google-owned Android operating system.
Alphabet will contribute $630 million to a settlement fund distributed to benefit consumers, per a court-approved plan, and will pay $70 million into a fund used by the states, the company said.
Developers will also now be able to use an alternative billing system to Google Play’s billion option, which the company said it has been piloting for over a year. The settlement also requires that Alphabet simplify the process of downloading apps directly from developers’ websites without using an online store such as Google Play.
The suit by the states is one of several legal challenges claiming Alphabet illegally snuffed out competition. The company last week lost a case brought by videogame maker Epic Games, alleging that Alphabet had squeezed excess profit from app developers using its dominant position.
Google posted on The Keyword titled: “Reaffirming choice and openness on Android and Google Play. It was written by Wilson White, VP, Government Affairs & Public Policy. Here is some of what was written:
…Today, the details of a settlement reached in September with state attorneys general were filed publicly. The 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. We’re pleased to resolve our case with the states and move forward to a settlement that includes:
Streamlining sideloading while prioritizing security: Unlike on iOS, Android users have the option to side load apps, meaning they can download directly from a developer’s website without going through an app store like Google Play. While we maintain it is critical to our safety efforts to inform users that side loading 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.
Expanding user choice billing to more people: App and game developers will be able to implement an alternative billion option alongside Google Play’s billing system for their U.S. users who can then choose which option to use when making in-app purchases. We have been piloting user choice billing in the U.S. for over a year and will now expand this option further.
Contributing to a settlement fund: Google will pay $630 million into a settlement fund to be distributed for the benefit of consumers according to Court-approved plan and $70 million into a fund that will be used by the states.
In my opinion, it seems that when a large company is doing sketchy things, it ends up facing a court that, in some cases, alters the large company’s plans. This is likely the best way to handle things in order to protect consumers.