Google and US developers have reached a $90 million settlement, ending the class action lawsuit brought by app makers over the tech giant’s practices deemed illegal and oppressive.
Google said in a blog post that the fund, being part of a larger settlement, “allows both parties to move forward and avoid years of uncertain and distracting litigation.”
“As part of the settlement, we’re establishing a $90 million fund to support U.S. developers who earned $2 million or less in annual revenue through Google Play during each year 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. If the Court approves the settlement, developers that qualify will be notified and allowed to receive a distribution from the fund,” it said.
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In addition to the fund, Google said it will implement new benefits that help developers innovate and communicate with their users. That will include continuing to provide developers with a tiered pricing model, and maintaining Google’s 15% commission rate for the first $1 million in annual revenue earned from Google’s Play Store for US developers.
The settlement was necessitated by app makers’ suit, which accused Google of maintaining policies that effectively forced developers to use its Google Play billing system — which for many years had a default 30 percent charge on all transactions.
Like Google, Apple faced the same issue with developers using the Apple Store, that the iPhone maker doled out $100 million in settlement for, after cutting its fee to 15% in a bid to appease developers.
Google had in July 2021, given a similar concession to smaller developers following this suit, cutting its app store’s fee to 15 percent for the first $1 million earned through any app.
Hagens Berman, the law firm representing the plaintiffs in this class-action, said some 48,000 small app developers in the US will be able to claim a payment from the $90 million fund. The law firm said some claimants could receive as much as $200,000 while the minimum payment is $250.
“Today, nearly 48,000 hardworking app developers are receiving the just payment they deserve for their work product — something Google sought to profit from, hand over fist,” said Hages Berman managing partner Steve Berman in a press statement. “With this settlement, developers will have more room to grow and more money in their pockets to promote their hard efforts.”
Under the settlement agreement, Google included other provisions aimed at helping developers. The web search giant said it’s revising its Developer Distribution Agreement to make it clear that developers can continue to use contact information obtained in-app to communicate with users out-of-app, including about subscription offers or lower-cost offerings on a rival app store or the developer’s website.
In addition, in new versions of Android, Google said it will maintain certain changes implemented in Android 12 that make it even easier for people to use other app stores on their devices, while being careful not to compromise the safety measures Android has in place.
It added that to showcase independent and small startup developers building unique high-quality apps, “we’re creating an “Indie Apps Corner” that will appear on the apps tab on the U.S. Google Play homepage and shine a spotlight on these developers.”
This settlement marks a shift from the app stores’ practices that have pitted Apple and Google against developers, and signals a possibility of further changes in the near future.
The issue came to limelight in 2020 after Apple removed the video game Fortnite from Apple Store. Fortnite had informed players they could purchase in-game currency at a discount from publisher Epic Games’ website, violating Apple’s developer policies. Apple and Fortnite entered a legal battle that the former won, though it has been appealed.
Google and Apple have been accused of abusing their app stores’ duopoly, prompting a proposed legislation by US lawmakers that will force the duo to make room for competition, allowing “sideloading,” or the ability for users to install apps from non-official sources.
Google said Android Operating System already supports sideloading, but Apple’s iOS does not. But the proposed legislation, if passed, and the EU’s Digital Markets Act, if it’s given final approval by the European Parliament for 2023, would make sideloading mandatory.