SAN FRANCISCO (CN) — A $700 million settlement over Google’s monopoly of the Android smartphone application market means consumers affected by the tech giant’s actions will see restitution.
The multistate settlement in State of Utah et al. v. Google LLC resolves claims that Google violated state and federal monopoly laws. Subject to a judge’s approval, Google will pay $630 million in restitution — minus costs and fees — to people who made purchases on the Google Play Store between August 2016 and September 2023 and were harmed by the Silicon Valley giant's anticompetitive actions.
“They effectively had a monopoly,” California Attorney General Rob Bonta said at a Tuesday press conference. “They’ve inflated prices for in-app purchases. Google created an unfair marketplace.”
No claims are required for affected people to receive a payment. Automatic payments will occur through PayPal or Venmo, though people can instead request a check or Automated Clearing House transfer. Additional details will come later.
Bonta said the smallest amount of restitution would be $2, adding that a large amount of money would be spread out to many people.
Separate from the restitution, Google will pay the states $70 million in costs, fees and penalties.
“Google took advantage of Android phone customers by limiting consumer choice and capitalizing on commissions for in-app purchases, all while limiting alternative ways to download apps,” Bonta said in a statement. “Google’s anticompetitive behavior hurt consumers by limiting their options, inflating prices on in-app purchases, and creating an unfair marketplace designed to funnel ill-gotten profits back to the company.”
A group of attorneys general sued Google in 2021, claiming the Mountain View-based company broke the law when it monopolized markets for Android app distribution and payment processing. Google entered into anticompetitive contracts to stop other app stores from being preloaded on Android devices. It also paid off certain app developers who could have started an app store that competed with the Google Play Store. Additionally, Google placed barriers that dissuaded people from directly downloading apps to their devices.
A settlement in principle was announced in early September. The specific terms of the deal were revealed Monday night.
“Today we are taking an important step to put a stop to this anticompetitive conduct and provide restitution to consumers harmed by Google's monopolization of the Android app market,” Bonta said. “This settlement sends a clear message: The California Department of Justice is committed to protecting consumers, holding industry accountable, enforcing antitrust laws, and ensuring a fair and competitive market.”
The settlement — filed in the Northern District of California — requires Google to stop its anticompetitive behavior and open markets to competition.
It must allow all developers to let users pay through in-app systems other than Google Play Billing for at least five years. It also must let developers offer cheaper prices for apps and in-app products for those who use non-Google bill systems for at least five years.
Additionally, Google must allow the installation of third-party apps outside the Google Play Store on Android phones for at least seven years. It can’t require developers to simultaneously launch app catalogs on the play store when they’re launched on another app store.
Google must also make compliance reports for five years.
Bonta said the $700 million settlement isn’t the first time Google has faced penalties in California. A $93 million settlement was reached in September over location-privacy consumer protection issues. In 2022, a $9 million settlement involved Google and iHeartMedia over misleading personal ads.
“We’ll hold you accountable,” Bonta said. “We’ll see you in court.”
Attorneys general from California, Utah, New York and Tennessee led the suit against Google, which included the attorneys general of all 50 states, District of Columbia and Puerto Rico and Virgin Islands.
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