Google Tentatively Settles States’ Play Store Antitrust Suit

Joel Rosenblatt and Malathi Nayak, Bloomberg News

The icon for Google LLC's Play Store application, center, is displayed on a Huawei Technologies Co. P20 Pro smartphone in an arranged photograph taken in Hong Kong, China, on Monday, May 20, 2019. Top U.S. corporations from chipmakers to Google have frozen the supply of critical software and components to Huawei, complying with a Trump administration crackdown that threatens to choke off China's largest technology company. Photographer: Justin Chin/Bloomberg , Bloomberg

(Bloomberg) -- Alphabet Inc. tentatively settled claims that Google Play abuses its control over Android mobile applications, potentially resolving antitrust complaints over the company’s policies brought by consumers and attorneys general of about three dozen states.

The deal was disclosed in a court filing Tuesday, but no terms were disclosed, including how much Google will pay. Lawyers representing the states, proposed class-action plaintiffs and Google asked a judge to cancel a trial scheduled for early November that would put at risk billions of dollars in revenue generated by the sale and distribution of apps through Google Play.

If the settlement is rejected by a judge, both sides will be “returned to their respective litigation positions,” according to the filing. The parties proposed reporting on the status of the deal at an Oct. 12 hearing.

Even if the deal is finalized, it won’t end the legal fight. There would still be a trial Nov. 6 over separate claims by Epic Games Inc. and Match Group Inc. that Google Play app distribution, payment and fee policies are unlawful.

But the potential settlement means Google will avoid a trial in which 21 million users sought damages, claiming they were overcharged in the company’s app marketplace. In July, US District Judge James Donato in San Francisco rescinded his order granting the plaintiffs class-action status that would have allowed the case to advance as a group lawsuit.

Consumers argued Google inflated Android app prices by taking, with some exceptions, a 30% cut of sales on Google Play. State attorneys general said in their 2021 complaint that Google used anticompetitive tactics to block competition and ensure that developers have no choice but to go through the Google Play store to reach users.

A Google spokesperson declined to comment. Lawyers representing consumers and state attorneys general didn’t immediately respond to requests for comment.

Tim Sweeney, Epic’s chief executive officer, tweeted that the Fortnite maker has suggested to the states that they should push Google to open up the Android app distribution and payment markets.

The states should also make sure Google can’t break settlement promises or the law moving forward, according to the letter. Google could do that “by simply shifting its anticompetitive behavior and collecting monopoly rents in other adjacent markets, such as imposing fees on transactions that do not go through Google Play Billing,” Epic’s lawyer wrote.

The case is In Re Google Play Store Antitrust Litigation, 21-md-02981, US District Court, Northern District of California (San Francisco).

(Updates with tweet by Epic Games CEO)