Google to pay $700 million in Play Store settlement

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. (File Photo: Reuters)
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. (File Photo: Reuters)

Summary

The agreement with a coalition of states resolves antitrust litigation related to the app store.

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 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 on devices 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 billing 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.

Alphabet said Monday that it was challenging the verdict and that the Epic case was “far from over."

The tech behemoth is also facing a monumental challenge related to its search engine. The Justice Department claims Google violated U.S. antitrust laws through agreements to sideline rivals.

The settlement announced Monday resolves a 2021 complaint brought by 36 states and the District of Columbia alleging that Google put in barriers to prevent the use of alternative in-app payment options and made deals to discourage other app-distribution methods.

Alphabet and the group of state attorneys general, led by Utah, announced a tentative settlement in early September, but didn’t disclose the terms of the agreement.

Alphabet said that its operating system and app store give more choices to consumers than their competitors, and the company is committed to improving Android and Google Play.

“We’re pleased to reach an agreement that builds on that foundation," the company said.

Write to Ben Glickman at ben.glickman@wsj.com

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