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Google settles antitrust suit with states

Tim Reckmann | CCNull

Over the next year, Google’s parent company Alphabet Inc. will face multiple antitrust lawsuits.

On Sept. 5, Alphabet introduced a settlement claim with 36 states, as well as Washington D.C., in which states claimed Google abused its control over Android apps in the Google Play app store.

The case went live this September.

Alphabet Inc. supposedly settled these claims, according to Bloomberg, with a deal that was disclosed in a court filing Sept. 5, but no further details — including its terms or how much Google will pay — were disclosed to the general public. 

If the settlement is rejected by the judge, both parties will remain in their original litigation position. An update on the deal won’t be available until Oct. 12.

The potential settlement means Google could walk away from the trial, in which 21 million users sought damages.  

Consumers argued that Google inflated Android app prices by practically taking a 30% cut of sales from the Google Play store. The state attorney general said in complaint from 2021 that Google “used anti-competitive tactics to block competition and ensure that developers had to go through the Google Play store to reach other users.”

Epic Games Inc., a video game developer and Match Group, which owns and operates many online dating services, are among the largest corporations also involved in litigation with Google over app distribution and unlawful payment and fee policies. Their trials will take place in November.

Epic’s chief executive officer, Tim Sweeney, tweeted that the company sent a memorandum to the lead state attorneys general in July “outlining the importance of achieving price competition with injunction relief – including preventing Google from imposing unearned monopoly taxes on third party services.”

Epic’s lawyer also suggested that Google could shift its anticompetitive behavior “by collecting monopoly rents in other adjacent markets, such as imposing fees on transactions that don’t go through Google Play Billing.”

Google’s trusted top company lawyer, Kent Walker, claims to fight for the same thing “that consumers should have easy access to the services they like the most.” They expect this trial to show “how much innovation is permissible under American antitrust law and how important these implications are for the tech sector.”

The Justice Department argued that Google had agreements with phone makers Apple Inc. and Samsung Electronics Co. to use it as the default search engines — preventing smaller rivals from receiving business. Three Apple executives were then called to Alphabet’s Google lawsuit as witnesses to the case.

Google faced a series of antitrust cases by both the USA and the EU, settling claims with a group of app developers just last year and accepting a $90 million payout. The company also agreed to assist in telling their customers about lower price options outside of the Google Play Store and showcase independent startup apps under a new “Indie Apps Corner” section.

While successful antitrust interventions may boost innovation, they don’t typically generate the significant competition and consumer bliss envisioned by regulators.

For the foreseeable future, U.S. politicians have actively sought to impose a bill, the Open App Markets Act, which would force big tech companies to allow users to side-load apps or install them without their app stores. This will mainly target Apple and Google’s future outlooks.

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