Google has reached a settlement in a lawsuit filed by all of the attorneys general in the U.S. — including Maine’s Attorney General Aaron Frey — concerning allegations of anti-competitive policies surrounding the Google Play Store, the company announced Monday.
Although the parties reached this settlement back in September, the details of the agreement are only now being made public as the result of filings submitted by Alphabet, Google’s parent company.
The $700 million settlement with the tech giant consists of $630 million in restitution payments to customers who were impacted by the practices under scrutiny in the lawsuit. An additional $70 million in penalties will be paid to the states.
Additionally, Google will be required to make a number of changes to their business practices so that they are more “procompetitive.”
“The settlement provides significant monetary relief to Eligible Consumers and unprecedented injunctive relief that should re-invigorate competition,” said the court filing for the case.
The filing explains that “the States allege[d] that Google has unreasonably restrained trade and monopolized Android app distribution and payment-processing services through anticompetitive conduct,” including:
- “Entering into anticompetitive contracts with [original equipment manufacturers] OEMs and mobile service providers to prevent other app stores from being proloaded on Android devices;”
- “Buying off key app developers to keep them from launching their own app stores or offering exclusive launches or special discounts to other app stores;”
- “Erecting technological hurdles to deter consumers from directly downloading (i.e., sideloading) apps and app stores to their devices.”
“As a result of Google’s unlawful conduct,” the filing says, “the States alleged Google has been able to extract enormous sums from consumers.”
Prior to the suit, Google had been collecting a 30 percent cut whenever a consumer purchased a paid app or in-app content.
“Google collects its 30% cut by forcing consumers to use Google Play Billing to buy apps and in-app content,” the filing states, “and by prohibiting app developers from suggesting alternative ways to purchase content (e.g., purchasing directly from the developer’s website, bypassing Google altogether).”
In a press release published earlier this week, Attorney General Frey spoke to the allegations against Google and the states’ success in the lawsuit.
“The alleged conduct by Google is an outrageous market manipulation that allowed it to cash in by limiting users’ choices,” Frey said. “Google, and other large corporations are not immune from consumer protection laws.”
“My office and other attorneys general across the country are proud to bring Google to account for this violation of consumers’ trust,” Frey concluded.
Click Here to Read Attorney General Frey’s Full Press Release
This settlement comes as the result of a two-year legal process in which “the States deposed over 40 individuals from Google, 20 third-party witnesses from over a dozen companies or organizations, and over a half-dozen expert witnesses.”
“Throughout, the States worked diligently to ensure that any settlement would include strong injunctive relief that would open up the relevant markets to competition,” the filing says.
According to the court documents, settlement talks began earnestly in August of 2022 and terms began to “coalesce” in July of 2023.
On September 5, 2023, the court was notified that an agreement had been reached, and by October 12 all of the attorneys general had approved of the settlement.
The settlement was finalized and executed in full on November 17, 2023.
“Injunctive terms of this breadth are unprecedented in U.S. antitrust regulation of Big Tech,” the filing stated. “The negotiated terms will offer significant, meaningful, long-lasting relief for consumers throughout the country.”
“No other U.S. antitrust enforcer has yet been able to secure remedies of this magnitude from Google, or, for that matter, from any of the other major digital platforms,” the filing said.
Click Here to Read the Full Court Filing for State of Utah, et. al. v. Google, LLC
In response to the settlement’s release, Google published a press release titled “Reaffirming Choice and Openness on Android and Google Play.”
“This 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,” Google said.
“We’re pleased to resolve our case with the states and move forward on a settlement that includes: Growing our commitment to app store choice; Streamlining sideloading while prioritizing security; Expanding user choice billing to more people; Expanding open communication on pricing; and Contributing to a settlement fund,” the company said.
“Android and Google Play provide choices and opportunities for innovation that other platforms we compete against simply don’t – from allowing for multiple app stores and avenues of app distribution to piloting new ways for users to pay for in-app purchases,” Google said. “We’re pleased to reach an agreement that builds on that foundation and we look forward to making these improvements that will help evolve Android and Google Play for the benefit of millions of developers and billions of people around the world.”
Click Here to Read the Full Press Release from Google
Anyone who made a purchase on the Google Play Store between August 2016 and September 2023 will be eligible to receive a piece of this settlement — a population totaling an estimated 102 million people.
Eligible individuals do not need to take any action in order to make a claim. If an eligible individual’s email address is already associated with a PayPal or Venmo account, payments will automatically be sent to the relevant account.
If the email address is not already associated with an account on one of those payment platforms, the individual will receive an email prompting them to either establish a PayPal or Venmo account or select another payment method, such as a check or ACH transfer.
The lawsuit against Google was led by the attorneys general from North Carolina, Utah, Tennessee, New York, and California and was joined by the attorneys general of all remaining states, as well as the District of Columbia and the territories of Puerto Rico and the Virgin Islands.
This is not the only lawsuit that the tech giant has faced in recent months.
In early September, an anti-trust lawsuit against Google — filed by President Donald Trump’s United States Department of Justice (DOJ) three years ago — went to trial.
The DOJ sued the tech company three years ago for using “illegal agreements to sideline its rivals” in such a way that consumers and advertisers were harmed in the process.
In the lawsuit, the Justice Department alleges that Google “illegally maintains a monopoly in online search and related advertising markets” by engaging in “restrictive” agreements with web browsers and phone companies — such as Apple, but also Mozilla, Samsung, and Verizon — that result in Google being set as the default search engine on the majority of cell phones in the United States.
Google also has agreements with Android-based devices that “forbid pre-installing or promoting rival search engines if they opt to take a cut of Google’s search revenue.”
According to the DOJ, these practices create an anti-competitive environment in which alternative search engines are artificially prevented from “improv[ing] their products,” and Google is given “an anticompetitive scale advantage.”
It is also argued that the situation “stifles innovation” because there is no incentive for Google to improve its search engine in order to maintain its position in the market.
The DOJ also argued that Google has used its dominance to unfairly raise the price of advertising in its search results.
Google, on the other hand, has defended its conduct, arguing that the agreements it has struck actually promote competition by “supplying browser providers with what they want: a single default search option for customers.”
The company also pointed out that its agreements don’t prevent browsers from offering alternative search engine options, as users are able to go into their settings and adjust the default search engine on their devices.
In terms of Android devices — where Google products come pre-installed — the company argues that users have every ability to “switch away” from the pre-loaded Google search engine if they so desired.
The fact that many users don’t do this “isn’t evidence of exclusionary practice” — according to Google — “but of consumers sticking with a superior product.”
The evidentiary phase of the trial concluded in mid-November, and closing arguments have been scheduled to take place in early May of next year, according to Reuters.
A ruling by U.S. District Judge Amit Mehta is expected to be issued at some point next year after closing arguments have been made.
Pocket change for them……and/or their insurer. They may spend more on lawyers to challenge it.