Google to pay $90 mn to settle Play Store lawsuit with app developers

Alphabet’s Google has agreed to pay $90 million to settle a legal fight with app developers. The dispute happened over the money they earned creating apps for Android smartphones and for enticing users to make in-app purchases, according to a court filing.

The company noted that the US developers who made less than $2 million each year between 2016 and 2021 through Google Play Store earnings will be eligible for compensation.

“A vast majority of US developers who earned revenue through Google Play will be eligible to receive money from this fund if they choose. If the Court approves the settlement, developers that qualify will be notified and allowed to receive a distribution from the fund,” Wilson White, VP, Government Affairs & Public Policy at Google, said in a blog post.

The plaintiffs originally filed the case against Google in 2020 in a federal court in San Francisco. The app developers had accused Google of gaining a monopoly in the Android app distribution space "through a series of anticompetitive contracts, strategic abuses of its dominance in other Android software applications, deficits in consumer knowledge and information, and the cultivation and exploitation of device users’ fear of malware.”

The case document also alleged that Google had a default 30% Play Store tax for developers on the sale of apps or in-app purchases. In 2021, however, Google reduced Play Store fees to 15% for subscription-based apps and as low as 10% for media apps in select categories like e-books or music distribution.

Hagens Berman Sobol Shapiro LLP, the legal firm that represented the plaintiffs, said that developers were entitled to a minimum compensation of $250 — with some settlements going above $200,000. There were likely 48,000 app developers eligible for the payment, said the legal representative.

Meanwhile, last year, tech major Apple agreed to be more flexible on its App Store restrictions on small developers, striking a deal in a class action. It also agreed to pay $100 million.

In Washington, Congress is considering legislation that would require Google and Apple to allow sideloading, the practice of downloading apps without using an app store. Google says it already allows the practice. This would also bar them from requiring that app providers use Google and Apple's payment systems.