Google will pay out $700m (£550m) and allow more competition on its Play Store after it was accused of using illegal restrictions and overcharging consumers when they buy items in apps.
It forms part of an antitrust settlement in the US, ahead of a legal battle with Fortnite maker Epic Games, which accused Google of having a monopoly on the mobile app business.
A jury in California agreed with Epic last week, which alleged parts of Google’s app business were anticompetitive.
On Monday, a settlement agreed between Google and US states means the tech giant will work to make it easier for consumers to download apps from developers directly.
It must also provide an alternative payment system for in-app purchases as well as its own.
Similarly to Apple and its App Store, Google charges commissions between 15% and 30% on purchases made in apps.
Epic has long been opposed to this as it makes huge amounts of money by selling items in Fortnite.
The game hasn’t been allowed on Apple and Google’s stores for years after the company tried to bypass the policy.
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State attorneys argued that Google’s commission drove prices up higher than they would have been had there been more competition for payment processing.
The charges generated billions in annual profit, according to court evidence.
Android app developers will also be given more flexibility when offering different payment options to consumers, instead of then being automatically processed through Google and its commission system.
Wilson White, Google’s vice president for government affairs and public policy, said the settlement “builds on Android’s choice and flexibility, maintains strong security protections, and retains Google’s ability to compete with other
(operating system) makers, and invest in the Android ecosystem for users and developers”.
All eligible consumers – an estimated 102 million people across the US – will receive at least $2 (£1.60), with some getting additional payments, based on their Play Store spending between 16 August 2016 and 30 September 2023.
Lawyers representing the US States said “no other US antitrust enforcer has yet been able to secure remedies of this magnitude from Google” or another major digital platform.
In January, Epic will ask the judge to issue an order requiring Google to make changes to the Play Store.
Google has denied any wrongdoing.