Google's $700 Million Settlement: Victory for Consumer Rights and Fair Competition

New Jersey Joins Forces with Nationwide Coalition to Challenge Google Play Store Monopoly.

Morristown, NJ: In a significant legal victory, New Jersey Attorney General Matthew J. Platkin, alongside the Division of Consumer Affairs and a bipartisan group of 52 other attorneys general, December 19, 2023, announced a groundbreaking $700 million settlement with tech behemoth Google. This resolution is a response to the lawsuit targeting Google's alleged anticompetitive practices in the Google Play Store, marking a pivotal moment in the ongoing battle for digital market fairness.

Initiated in 2021, the lawsuit accused Google of monopolizing the Android app distribution and in-app payment processing markets. The complaint underscored various anti-competitive tactics, such as Google's restrictive contracts impeding the growth of competing app stores, financial incentives to deter developers from establishing rival platforms, and the deployment of technological hindrances that discourage consumers from exploring non-Google Play Store apps.

Attorney General Platkin emphasized the criticality of ensuring fair, transparent pricing and consumer choice in the digital realm, equating its importance to traditional business practices. He stressed the necessity for Google to abandon its opaque contracts and pricing strategies.

Cari Fais, Acting Director of the Division of Consumer Affairs, condemned Google's actions for maintaining artificially high prices for Android users and stifling digital marketplace competition. The settlement demands Google to compensate consumers for these transgressions.

Under the settlement, Google will disburse $630 million in restitution to consumers impacted by these practices from August 2016 to September 2023. Additionally, Google will pay $70 million in penalties to the states. Eligible consumers will automatically receive payments via PayPal, Venmo, check, or ACH transfer, without needing to submit a claim.

The settlement also mandates significant reforms in Google's business practices, including:

Permitting developers to use in-app billing systems other than Google Play Billing for a minimum of five years.
Allowing developers to offer lower prices for apps and in-app products via non-Google billing systems for at least five years.
Enabling developers to direct consumers to alternative billing systems by advertising lower prices within their apps, for a minimum of five years.
Prohibiting contracts that mandate the Play Store as the exclusive, pre-loaded app store on devices or home screens for at least five years.
Permitting the installation of third-party app stores on Android phones alongside the Google Play Store for at least seven years.
Modifying warnings when users attempt to download third-party apps from outside the Play Store, for a minimum of five years.
Sustaining Android system support for third-party app stores, including automatic updates, for four years.
Allowing developers to release their apps on other app stores without simultaneous Play Store launch for at least four years.
Submitting to monitoring by an independent compliance auditor to ensure the cessation of anticompetitive practices, for at least five years.

This lawsuit saw collaboration with major app developers Epic Games and Match. While Match reached a separate settlement earlier, Epic Games pursued a trial, resulting in a unanimous jury verdict against Google for violating federal antitrust laws.

The coalition, led by attorneys general from North Carolina, Utah, Tennessee, New York, and California, represents a united front of all states, the District of Columbia, Puerto Rico, and the Virgin Islands.

New Jersey has been actively challenging Google's practices, including joining a federal lawsuit against its digital advertising monopoly and settling a case over Google's alleged privacy violations in its location data collection.

This settlement, representing a concerted effort by states nationwide, is a testament to the commitment to protect consumer rights and promote healthy competition in the digital era. Deputy Attorney General Yale A. Leber of New Jersey's Consumer Fraud Prosecution Section led the state's legal team, under the guidance of several senior officials, marking a significant step in ensuring fair play in the digital marketplace.