Alphabet, States Reach $700 Million Deal In Google Play Feud

(Bloomberg) -- Alphabet Inc. will pay $700 million and alter its Google Play policies to settle claims that the app store unlawfully dominates the Android mobile applications market, resolving antitrust complaints brought by attorneys general of about three dozen states and consumers.

The deal disclosed in a court filing late Monday calls for tweaks to Google Play policies designed to reduce barriers to competition in the markets for app distribution and payment processing. The lawsuits that were grouped together in federal court in California had threatened billions of dollars in revenue generated by the sale and distribution of apps through Google Play.

“This settlement builds on Android’s choice and flexibility, maintains strong security protections, and retains Google’s ability to compete” with makers of other operating systems, and invest in the Android ecosystem for users and developers, Wilson White, Google’s vice president for Government Affairs & Public Policy, said in a statement.

A federal jury in San Francisco this month sided with Epic Games Inc. over its claims that Google Play app distribution, payment and fee policies are unlawful. 

State attorneys general alleged that Google used anticompetitive tactics to block competition and ensure that developers have no choice but to go through the Google Play store to reach users in their complaint filed in 2021. In a separate class-action on behalf of almost 21 million consumers. Google was accused of inflating Android app prices by taking as much as a 30% cut of Google Play transactions. 

Alphabet announced a tentative settlement in September with the states and consumers without disclosing financial details. Monday’s filing says all 50 states, the District of Columbia and two US territories have now joined the accord. The technology company separately settled claims by Match Group Inc. ahead of the trial with Epic in San Francisco that kicked off in early November.

The settlement creates a $630 million common fund to benefit consumers and a $70 million fund to resolve state claims for penalties, restitution, disgorgement and fees. 

The case is In Re Google Play Store Antitrust Litigation, 21-md-02981, US District Court, Northern District of California (San Francisco).

(Updates with Google Play policy changes in first paragraph)

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