In a significant development in antitrust litigation, Google has agreed to pay approximately $700 million in a settlement with several U.S. states and plaintiffs’ groups over allegations related to its Android app store (In re Google Play Developer Antitrust Litigation, No. 3:20-cv-05792-JD (N.D. Cal.)).
In this multidistrict antitrust litigation, four plaintiff groups, including, without limitation, Epic Games., Inc., Consumer Plaintiffs, Developer Plaintiffs, and the Plaintiff States, alleged that Google stifled competition in its app Play Store.
The state attorneys general contended that Google’s practices, including, without limitation, monopolization, tying, deceptive practices, and collecting anticompetitive commissions on in-app purchases, drove up digital transaction prices, affecting consumers, competitors, and the market at large.
Details of the Settlement
The settlement includes approximately $630 million to compensate consumers. This fund addresses the alleged higher costs that consumers bore, due to Google’s alleged anti-competitive practices in the Play Store.
Eligible consumers will receive payments based on their spending on the Play Store between 2016 and 2023. Additionally, approximately $70 million will cover penalties and other costs.
Structural Changes
In addition to paying compensation and fines, Google has agreed to make significant changes, including the following, without limitation:
- Making it easier for consumers to download Android apps from other sources;
- Reducing security warnings when using alternatives; and
- Allowing more flexibility for app developers in payment processing.
These changes are aimed at fostering a more-competitive environment and breaking down barriers allegedly erected by Google’s previous practices.
Impact of the Settlement
This settlement is a victory for consumers, potentially leading to more competitive prices and choices in the digital-app marketplace. It could represent a shift towards greater market openness and fair competition.
For Google, the settlement could signal a need for strategic adjustments in its business models. More broadly, it sends a message to the technology industry about the importance of adhering to antitrust laws and the consequences of failing to do so.
Epic Games, the maker of Fortnite, opted out of the settlement and took its case to trial (In re Google Play Developer Antitrust Litigation, No. 3:20-cv-05792-JD (N.D. Cal.)). On December 11, 2023, a jury ruled in favor of Epic, finding that Google entered into agreements and unreasonable restraints of trade in connection with the Google Play app store and billing services that violated the federal antitrust laws. Google stated that it would appeal the verdict.
Conclusion
Google’s approximate $700 million settlement highlights the need for antitrust enforcement in the digital age. It underscores the growing emphasis on open competition and the increasing accountability of tech giants. Going forward, these developments will undoubtedly shape digital marketplaces and influence the strategies of major players in these arenas. Nematzadeh PLLC has been at forefront of litigating cases that implicate the exciting and ever-changing landscape for the application of antitrust laws to evolving digital marketplaces. As more and more markets transition to the digital world, application of the antitrust laws must keep pace. Our lawyers are experienced in litigating these cutting-edge issues.
You can reach Nematzadeh PLLC by calling (646) 799-6729 or emailing lawyer@nematlawyers.com for a confidential, free consultation.
