Google Will Pay $90 million to Settle Antitrust Lawsuit with App Developers
- Laurent Giret
- Jul 01, 2022
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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.
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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.