Consumers to Share in $630 Million of Settlement Google Made With States

Google has agreed to pay consumers $630 million and make several other concessions to settle allegations that it had constrained competition against its Android app store — the same issue that went to trial in another case.

Although Google struck the deal with state attorneys general in September, the settlement’s terms weren’t revealed until late Monday in documents filed in San Francisco federal court. The disclosure came a week after a federal court jury rebuked Google for deploying anticompetitive tactics in its Play Store for Android apps.

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The settlement with the states includes $630 million to compensate U.S. consumers funneled into a payment processing system that state attorneys general alleged drove up prices for digital transactions within apps downloaded from the Android-based Play Store.

Eligible consumers will receive at least $2, according to the settlement, and may get additional payments based on their spending in the Play Store from Aug. 16, 2016 to Sept. 30, 2023. The estimated 102 million U.S. consumers who made in-app purchases during that time are supposed to be automatically notified about options to receive their cut of the money.

Another $70 million of the pretrial settlement covers the penalties and other costs that Google is being forced to pay to the states. The agreement is more than 25 times the $23 million consolidated settlement earlier this year of class action privacy lawsuits going back a decade.

States wanted to ask $10.5 billion in court

Although Google is forking over a sizable sum, it’s a fraction of the $10.5 billion in damages that the attorneys general planned to seek from the company if the case had gone to trial.

Like Apple does in its App store, Google collects commissions ranging from 15 percent to 30 percent on in-app purchases. State attorneys general contended those fees drove prices higher for consumers than they would have been in 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 agreed to make other changes to make it easier for consumers for the next five years to install Android apps from outlets other than its Play Store. It will refrain from issuing as many security warnings, or “scare screens,” when alternative choices are being used.

The makers of Android apps will also gain more flexibility to offer alternative payment choices to consumers instead of having transactions automatically processed through the Play Store and its commission system. Apps will be able to promote lower prices available to consumers who choose an alternative to the Play Store’s payment processing.

Androids phones are tops worldwide, not so in U.S.

Worldwide, more than 7 in 10 mobile phones use an Android operating system, according to Statcounter Global Stats. In the U.S., nearly 6 in 10 smartphones use Apple software.