Google said Thursday it will pay $90 million to settle a lawsuit against US developers who accused Google of abusing its power to distribute apps and charging an unfair 30% commission on app purchases and in-app purchases through the Play Store .
The company noted that US developers who earned less than $2 million each year from Google Play Store earnings between 2016 and 2021 will be eligible for compensation.
“The vast majority of US developers who have made money through Google Play will be eligible to receive money from this fund if they choose. If the court approves the settlement, eligible developers will be notified and allowed to receive a distribution from the fund,” the search giant said in a blog post.
Hagens Berman Sobol Shapiro LLP, the law firm that represented the plaintiffs, said the developers were entitled to a minimum of $250 in damages — with some settlements exceeding $200,000. The company found that more than 48,000 US developers are eligible to be paid by Google.
Plaintiffs originally filed a lawsuit against Google in 2020 in California, alleging that the company had obtained a monopoly on Android app distribution through a series of anti-competitive agreements, strategic abuses of its dominance in other Android software applications, and lack of consumer knowledge and information. , and cultivating and exploiting device users’ fear of malware.” The case document also relied on the fact that Google had a default 30 percent tax in the Play Store for developers on app sales or in-app purchases.
To deal with criticism of the 30% tax on the Play Store, in 2021 Google lowered the cut to 15% on the first million dollars a developer earns each year. It later reduced Play Store fees to 15% for subscription apps and 10% for media apps in select categories such as e-books or music distribution. According to the assessment of the compensation expert, dr. Michael Williams, this fee reduction could save developers more than $109 million in service costs by 2025.
The Mountain View-based company said that in addition to the $90 million payment pool, it is revising its developer distribution agreement document to make clear that developers can contact users through means outside the app, such as promotional e -mail — similar to the change Apple made last year — if they got that data in the app. The company said it will launch a new section in the Play Store called “Indie Apps Corner” to highlight apps made by small startups and independent developers as well. What’s more, the company will publish annual Google Play transparency reports detailing things like app removals and account terminations.
Currently, Google and Apple force developers to use their own payment systems for in-app purchases for apps distributed through their own app stores. However, this may change due to numerous lawsuits and legislation against these companies in various jurisdictions. Last year, Google agreed to allow developers in South Korea to use third-party payment options – after the country passed a new law on digital payment systems while cutting service fees by 4%.
Over the past few months, Google has entered into various agreements with Spotify and Match Group to use alternative payment systems for their apps. Announcing the deal with the former, the search giant said that “we will explore user-choice billing in other select countries.”