Google has agreed to pay $700 million to settle a massive antitrust class action lawsuit accusing the tech giant of using its Google Play store to monopolize control over consumer choices and the ability of app creators to load apps within the Android smartphone platform.
Of that total, $70 million will go directly to 39 state governments who helped lead the antitrust action, according to a settle agreement filed in San Francisco federal court on Dec. 18.
Under that settlement, a collection of trial lawyers who represented classes of millions of consumers across the U.S. could collect an additional $122.9 million in attorney fees from the deal, or about 17.5% of the total settlement fund.
Karma Giulianelli, of the firm of Bartlit Beck, is among the lawyers who could receive a cut of up to $128 million in fees from the Google Play settlement.
| Bartlit Beck
Law firms receiving a cut of those fees include: Bartlit Beck LLP, of Chicago; Kaplan Fox & Kilsheimer LLP,of New York; Cotchett, Pitre & McCarthy LLP, of San Francisco; Korein Tillery LLC, of Chicago; Milberg Coleman Bryson Phillips Grossman PLLC, of New York; and Pritzker Levine LLP, of Emeryville.
As many as 71.4 million Google Play customers included in the class action could receive a cut of the $500 million that would be estimated to remain, after the states, lawyers and costs for litigation and settlement administration are paid.
The settlement requires each consumer included in the class action to receive at least $2. Simple arithmetic indicates consumers could expect up to $7 each in refunds from Google under the deal.
If approved by U.S. District Judge James Donato, the settlement would end a sprawling two-year-old court fight launched under a joint prosecution agreement between state attorneys general and the trial lawyers from those law firms who filed the lawsuits.
The legal actions accused Google of profiting from fees collected from consumers who owned Android-powered smartphones, and allegedly had no choice but to pay Google for the opportunity to load and use apps on their phones, which they could only obtain through the Google Play store.
According to the lawsuits and a release from California Attorney General Rob Bonta, Google allegedly signed anticompetitive contracts to prevent other app stores from being preloaded on Android devices; allegedly bought off key app developers who might have launched rival app stores to the Google Play store; and allegedly created technological barriers to deter consumers from directly downloading apps to their devices.
The legal actions asserted these alleged actions violated federal and state anti-monopoly laws.
According to a brief filed by the attorneys general in support of the settlement, settlement negotiations have been ongoing since the lawsuits were first filed, even as the parties litigated the actions in court.
In addition to Google's promise to pay $700 million, the settlement also includes agreed court orders which would alter the Google Play system, rules and processes.
Under the terms of the settlement, Google has agreed to:
- Give all developers the ability to allow users to pay through in-app billing systems other than Google Play Billing for at least five years;
- Allow developers to offer cheaper prices for their apps and in-app products for consumers who use alternative, non-Google billing systems for at least five years;
- Permit developers to steer consumers toward alternative, non-Google billing systems by advertising cheaper prices within their apps for at least five years;
- Not enter contracts that require the Play Store to the be the exclusive pre-loaded app store on a device or home screen for at least five years;
- Allow the installation of third-party apps on Android phones from outside the Google Play Store for at least seven years;
- Revise and reduce the warnings that appear on an Android device if a user attempts to download a third-party app from outside the Google Play Store for at least five years;
- Maintain Android system support for third-party app stores, including allowing automatic updates, for four years;
- Not require developers to launch their app catalogs on the Play Store at the same time as they launch on other app stores for at least four years; and
- Submit compliance reports to an independent monitor who will ensure that Google is not continuing its anticompetitive conduct for at least five years.
In a statement announcing the settlement, Bonta said: “Google took advantage of Android phone customers by limiting consumer choice and capitalizing on commissions for in-app purchases, all while limiting alternative ways to download apps. Google’s anticompetitive behavior hurt consumers by limiting their options, inflating prices on in-app purchases, and creating an unfair marketplace designed to funnel ill-gotten profits back to the company.'
“Today we are taking an important step to put a stop to this anticompetitive conduct and provide restitution to consumers harmed by Google's monopolization of the Android App market."
Google has been represented in the case by attorneys Glenn D. Pomerantz, of the firm of Munger Tolles & Olson, of Los Angeles; and Brian C. Rocca, of Morgan Lewis & Bockius, of San Francisco.