TOPLINE
Google announced the details of a sweeping settlement with all 50 states on Monday, which include expanded options for developers to use their own billing systems—leaving app makers with options that could lead to savings for consumers on in-app subscriptions and services.
KEY FACTS
Google announced they would allow an alternative “user choice billing” option for all U.S. developers—meaning app developers can now pay fees between 11% and 26% to Google on all purchases from the Play Store, in-app purchases, and subscriptions.
Google previously forced all developers to use its in-house billing system, which took a 15% cut—increased to 30% after the first $1 million earned through purchases.
Google began piloting the “user choice billing” program in 2022 with Spotify and Bumble—it is unclear if any other developers were given the reduced rates before the settlement, The Verge reported one year later.
Developers could slash prices and move savings to consumers—but they could also decide to simply keep the extra profits.
Google also said it would “streamline” users’ ability to sideload apps—or download apps directly from a developer’s website—which would mean some developers could cut the costs of quality control or verification required for apps to be sold on the Play Store.
KEY BACKGROUND
Google struck a settlement deal in a massive lawsuit filed by all 50 state attorneys general in September, but the details of the agreement were not made public until Monday. As part of the deal, Google will pay $630 million into a settlement fund, which will then be distributed to consumers. Another $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 minimum payment of $2, with the possibility of additional cash based on their spending on the app store in that timeframe.
CHIEF CRITIC
Epic Games, the massive gaming developer also involved in legal disputes with Google, criticized the settlement, with CEO Tim Sweeney calling it an “injustice to all Android users and developers.” Corie Wright, the VP of Public Policy at Epic Games, said it “does not address the core of Google’s unlawful and anticompetitive behavior.” Wright called the user choice billing system “deceptively labeled,” criticizing it for still taking an 11% to 26% cut “on top of payments Google isn’t involved in processing.” The popular video game publisher won an antitrust lawsuit against Google just one week before the details of the settlement were announced, and said they planned to “seek meaningful remedies to truly open up the Android ecosystem.”