Google Will Pay $90 million to Settle Antitrust Lawsuit with App Developers

Posted on July 1, 2022 by Laurent Giret in Google with 9 Comments

Google announced yesterday that it has agreed to pay $90 million to settle an antitrust lawsuit with a group of US developers. The case was initially filed in 2020 when the plaintiffs accused Google of anti-competitive practices with the 30% fee Google takes on in-app purchases on its Google Play Store.

As part of the settlement, Google says that US developers who earned less than $2 million each year on the Play Store between 2016 and 2021 will be eligible to receive money from the $90 million fund. “If the Court approves the settlement, developers that qualify will be notified and allowed to receive a distribution from the fund,” explained Wilson White, VP, Government Affairs & Public Policy at Google.

Last year, Google had already made some moves to please app developers who still have no choice but to use Google’s own payment system for in-app purchases on Google Play. The company first reduced its service fee for Google Play from 30% to 15% for the first $1 million of revenue developers made with their apps each year.

Back in October, the company also lowered the service fee for subscriptions purchased inside of an app from 30% to 15%. Additionally, the service fee for media apps, which includes on-demand music streaming services, e-book readers, and more was also reduced to as low as 10 percent.

In addition to this $90 million fund for US app developers, Google will also help small developers get more exposition with a new “Indie Apps Corner” that will appear on the US Google Play homepage. Additionally, Google says that it will now allow developers to communicate with users out-of-app and notify them about lower-cost offerings outside of Google Play.

Google seems ready to go even further and allow developers to use alternative payment systems for their apps on Google Play. Back in March, the company started a pilot program with Spotify, which is now allowed to use its own billing system instead of Google’s.

In recent months, Apple has also been pressured by app developers to do the same thing. To respect a new law that’s just been adopted in South Korea, the company announced earlier this week that apps distributed on the App Store in South Korea can now provide an alternative in-app payment system in addition to Apple’s.

In the near future, Apple and Google could well be forced to open up their app stores even more. The EU Digital Markets Act, which could be adopted by the EU Parliament next year could lead to Apple allowing iPhone and iPad users to sideload apps. In the US, the Open App Markets Act antitrust also aims to make sideloading apps allowed on Google and Apple’s mobile platforms.

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Comments (9)

9 responses to “Google Will Pay $90 million to Settle Antitrust Lawsuit with App Developers”

  1. jchampeau

    Google's revenues in 2021 were $257 billion. This $90 million settlement represents 0.04% of their revenues last year. It literally amounts to a rounding error.

  2. mikegalos

    That's effectively a nuisance fee level payment to stall off actual antitrust rulings from governments which will minimally run that much in daily fines until they comply.

  3. lvthunder

    Maybe I should walk into WalMart and demand to be able to use a payment system of my choice. This is ridiculous. There is a cost to running an app store. They shouldn't be forced to either lose money or run like a nonprofit.

  4. Ruvger

    Google (and Apple) leave money on the table. If their payment fees were fair I would offer payment inside my apps. Instead, I do it outside and cut Google (and Apple) out of the deal. Maybe I might get some more subscribers if they could pay directly through the app but I can't say I've noticed a difference between my apps which do and apps which don't.

    • lvthunder

      Go and try to sell something on Amazon and let me know how much they take off the top. I’ll give you a hint it’s 50%.

  5. scovious

    It would be foolish to accept an offer as low as 90$ million. 77$ Billion per year would closer represent the 30% revenues that Google takes from developers in exchange for simple server hosing and allowing them to use Google's pre-existing infrastructure.

    • lvthunder

      You show your ignorance when you say simple web hosting. It’s not. Sure the product page is a simple webpage, but on top of that you have content moderation. You wouldn’t want a racist review. You have app review. You wouldn’t want the store to be full of scams and illegal content. Then you have updates. You also have the accounting part and the tech support department.

  6. illuminated

    Yeah, 90m really helps/s

    Now I cannot even buy audible or kindle books on android because of stupid google appstore policies. What a joke.

    • lvthunder

      Who says you can’t. You just have to go to the webpage instead of the app. It’s not that hard.