Introduction
Google announced details of a wide-ranging settlement with all 50 states on Monday, which includes expanded options for developers to use their own billing systems, allowing app makers options that could lead to savings for consumers on subscriptions and in-app services.
Main Details
Google announced that it will allow the “User Choice Billing” option for all developers in the United States, meaning that app developers can now pay fees ranging from 11% to 26% to Google on all purchases from the Play Store, in-app purchases, and subscriptions.
Previously, Google had forced all developers to use its own billing system, which takes 15% of profits – rising to 30% after the first million dollars earned from purchases.
Google began trialing the “User Choice Billing” program in 2022 with Spotify and Bumble – it is unclear whether any other developers received the reduced rates prior to the settlement, as reported by The Verge after a year.
Developers can lower prices and pass on savings to consumers – but they may also choose to keep the extra profits.
Google also announced that it will simplify users’ ability to download apps directly from the developer’s website – meaning some developers can reduce the costs of quality assurance or verification required to sell apps on the Play Store.
Main Background
Google signed a settlement agreement in a massive lawsuit filed by all 50 state attorneys general in September, but details of the agreement were not disclosed until Monday. As part of the agreement, Google will pay $630 million into a settlement fund, which will be distributed to consumers. $70 million will be paid directly to the states. Eligible consumers who used the Play Store between August 2016 and September 2023 will receive a cash payment of at least $2, with the possibility of additional cash based on their spending on the app store during that timeframe.
Main Critics
Epic Games, the developer of popular video games and also involved in legal disputes with Google, criticized the settlement, with CEO Tim Sweeney describing the agreement as “a disservice to all Android users and developers.” Corey Wright, Vice President of Public Policy at Epic Games, stated that it “does not address the core of Google’s illegal behavior and competition.” Wright criticized the User Choice Billing system as “misleadingly named,” objecting that it still takes a cut ranging from 11% to 26% “in addition to payments that Google does not participate in processing.” The company known for publishing popular video games won a lawsuit against Google just a week before the settlement details were announced, and stated it intends to “seek meaningful corrective measures to create a truly open Android environment.”
Looking Ahead
For more information, you can read the following articles:
– Google to pay $700 million and make changes to Play Store billing to settle lawsuit by Celaditya Ray.
– Google has maintained an illegal monopoly for over a decade, claims the Justice Department by Richard Neva.
– Google faces court for the first time over wage discrimination allegations by Richard Neva.
Zachary Folk
Editorial Standards
Reprint permissions and rights
Leave a Reply