Alphabet Inc. has agreed to pay $90 million to settle a legal battle with app developers to build apps for Android smartphones and entice users to make in-app purchases, according to court filings.
In a lawsuit filed in federal court in San Francisco, App developers had accused Google of using agreements with smartphone makers, technical hurdles, and revenue sharing agreements to effectively shut down the app ecosystem and through its, Google Play billing system with a default service charge of 30%. Most of the payments were stopped.
As part of the proposed settlement, Google said in a blog post that it would put $90 million into a fund to support app developers earning $2 million or less in annual revenue from 2016-2021. Google further added in the post, “Most US developers earning revenue through Google Play will be eligible to receive funding from this fund, if they so choose.”
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 so in 2021. According to Hagens Berman Sobol Shapiro LLP, representing the plaintiffs, potentially 48,000 app developers were eligible to apply for the $90 million funds, and the minimum payment is $250.
Apple Inc. agreed last year to loosen App Store restrictions on smaller developers, a deal in a class action, and also agreed to give $100 million. Congress is considering legislation in Washington that would require Google and Apple to allow sideloading or the practice of downloading apps without using the App Store. Google says it already allows sideloading. It would also prevent them from requiring that app providers use payment systems from Google and Apple.
