Google pays $700 million and makes minor changes to app store to settle with 50 states

The biggest change: If this settlement is approved, Google will have to allow developers to block consumers from the Google Play Store for several years.

You can read the full 68-page comparison yourself at the end of this story, but here’s the TL;DR about what’s in it:

Does that sound like a lot? When you add it all up, you actually get a slightly different Google App Store landscape than we’ve seen in the last decade and one that’s changing. But not only do each of these concessions have an expiration date, many of them are also arguably not real concessions.

Google argued during the Epic vs. Google trial that users are already able to install third-party apps on their devices in a variety of ways, claiming that many of its agreements with developers, OEMs and carriers do not provide for this. For example, put Google Play exclusively on a phone or its home screen.

We confirmed with Google spokesman Dan Jackson this evening that User Choice Billing participants will receive a discounted rate of just 4 percent off the Google fee when users choose their own payment system, and that this price will not change as a result of the agreement. Not only has Google discovered internally that developers would lose money if users chose the 4 percent rate, but Google is also giving companies like Spotify a free ride while apparently charging everyone else.

Perhaps most importantly, Google reserves the right not to allow developers like Netflix to link to their own sites to provide a discount to their users. “Google is not obligated to allow developers to include links that take a user outside of an app distributed through Google Play to make a purchase,” the settlement agreement states. We’re still waiting to find out whether Apple will allow links and/or buttons to alternative payment systems based on the Epic v. Apple ruling. However, the settlement between Google and the State AGs suggests that regardless, Google will not be required to allow links.

In a tweetEpic Games CEO Tim Sweeney calls the settlement “an injustice to all Android users and developers,” adding that he “endorses Google’s 30 percent monopoly rent by replacing Google Play’s anti-competitive billing peg with a new, anti-competitive, “User choice” imposed by Google is replaced by billing lock-in, which adds a useless Google tax of 26% on payments they don’t process.” Epic has an official blog post that basically says the same thing.

According to court documents, the states will ask Judge James Donato to approve the settlement on February 8. This is the same judge overseeing Epic v. Google, and both parties will be discussing what Epic actually won in this case in the second week of January.

In 2022, Google settled a smaller legal dispute with app developers for $90 million.


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