California Attorney General Announces $700 Million Multistate Settlement Agreement with Google
By Magaly Muñoz
On Tuesday morning, in downtown San Francisco, Attorney General Rob Bonta announced that Google has agreed to a $700 million settlement with Google for monopolizing the Android application market.
The multistate, bipartisan settlement is a rare victory for two sides of the political aisle that often cannot agree on much, Bonta emphasized at the conference, but they were all in fast agreement to fight for changes and restitution for the impacted consumers.
Google will pay $630 million to over 100 million Android consumers to compensate for the high prices they charged for digital transactions in Google Play Store. The minimum payouts will range from $2 or more to those who were harmed by Google’s anti-competitive market practices between August 2016 to September.
“They made it extremely difficult for consumers to have options, for consumers to have options that would reduce price and they essentially effectively maintained a monopoly,” Bonta said.
Google will also pay out $70 million to the states in penalties, costs and fees.
The lawsuit, State of Utah et al. v. Google LLC, alleged that Google signed anti-competitive contracts to prevent other app stores from being preloaded on Android devices, bought off key app developers who might have launched rival app stores to the Google Play store, and created technological barriers to deter consumers from directly downloading apps to their devices.
In addition to the payouts, the settlement requires Google to cease its anti-competitive operations and make changes in their market conduct for injunctive relief. The changes include giving developers the ability to allow users to make payments through in-app billing systems other than Play Billing for a minimum of five years; allow for the installation of third-party apps on Android phones from sources outside the Google Play Store for at least seven years; maintain Android system support for third-party app stores, including allowing automatic updates, for four years; and many more changes.
The settlement also stipulates that Google must provide compliance reports to an independent monitor who will verify that the company is not continuing its anti-competitive behavior for at least five years. Bonta is confident that Google will comply with all the changes specified in the settlement, and if they don’t, legal action will be taken.
Other state attorneys general shared their views on the big win against Google and its anti-competitive behavior.
Oregon Attorney General Ellen Rosenblum said in a statement that Google has to make right for the harm it cost their Android consumers.
“Every company is required to play by the rules, from the smallest of mom-and-pop shops to the biggest brands on the planet, and this settlement demonstrates that principle as clear as day,” Rosenblum said.
In a statement Tuesday morning, New York Attorney General Letitia James condemned the market abuse that Google established to raise prices and block app developers from fairly selling their products in the Play Store.
“No company, no matter how large or powerful, is allowed to corner a market and use its influence to overcharge consumers and smother competition,” James said.
But this is not the first time the Department of Justice (DOJ) has taken a stand against Big Tech.
In September, the state secured a $93 million settlement with Google for violating California’s consumer protection laws, where they misled users by collecting and using their location data for consumer profiling and advertising purposes without obtaining informed consent.
In October, a lawsuit was filed against Meta, the parent company of Facebook and Instagram, by over 30 states alleging that their apps are harming the mental health of children who are becoming addicted to their platforms.
“Today’s settlement, as well as our active lawsuits send a clear message to not just Google but to all corporations doing business in California: If you use your power to illegally bend the market at the expense of consumers, small business owners and the economy, we’ll hold you accountable. We’ll see you in court,” Bonta said.
The attorney general would not comment on whether they would go after Apple, which has been accused of trying to stifle competition in the app market, but he shared that the settlement with Google could serve as a model for “other app stores” including those headquartered in California, such as Apple.
