Alphabet Inc’s Google has agreed to pay $90 million to settle a legal dispute with app developers over the money they made creating apps for Android smartphones and enticing users to make in-app purchases.
In a lawsuit filed in federal court in San Francisco, the app developers accused Google of effectively closing the app ecosystem by using agreements with smartphone makers, technical barriers, and revenue sharing agreements to shunt most payments through its Google Play billing system with a default service fee of 30%.
As part of the proposed settlement, Google said in a blog post it would put $90 million in a fund to support app developers who made $2 million or less in annual revenue from 2016-2021.
“A vast majority of U.S. developers who earned revenue through Google Play will be eligible to receive money from this fund, if they choose,” Google said in the blog post.
Google said it would also charge developers a 15% commission on their first million in revenue from the Google Play Store each year. It started doing this in 2021.
The proposed settlement must be approved by the court.
According to Hagens Berman Sobol Shapiro LLP, who represented the plaintiffs, there were approximately 48,000 app developers eligible to apply for the $90 million fund, and the minimum compensation is $250.
Apple Inc agreed last year to ease App Store rules on small developers as part of a class action settlement. In addition, it agreed to pay $100 million.
Congress is debating legislation that would require Google and Apple to allow sideloading, or the practise of downloading software without using an app store, in Washington. According to Google, sideloading is already possible. It would also prevent them from mandating app developers to utilise Google or Apple’s payment systems.