Google to pay $125 million to settle legal fight with app developers

Google said it would also charge developers a 15 per cent commission on their first million in revenue. PHOTO: REUTERS

WASHINGTON (REUTERS) - Google has agreed to pay US$90 million (S$125 million) to settle a legal fight with app developers over the money they earned creating apps for Android smartphones and for enticing users to make in-app purchases, according to a court filing.

The app developers, in a lawsuit filed in federal court in San Francisco, had accused Google of using agreements with smartphone makers, technical barriers and revenue sharing agreements to effectively close the app ecosystem and shunt most payments through its Google Play billing system with a default service fee of 30 per cent.

As part of the proposed settlement, Google said in a blog post it would put US$90 million in a fund to support app developers who made US$2 million or less in annual revenue from 2016-2021.

"A vast majority of US 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 per cent commission on their first million in revenue from the Google Play Store each year. It started doing this in 2021.

The court must approve the proposed settlement.

There were likely 48,000 app developers eligible to apply for the US$90 million fund, and the minimum payout is US$250, according to law firm Hagens Berman Sobol Shapiro, which represented the plaintiffs.

Apple agreed last year to loosen App Store restrictions on small developers, striking a deal in a class action. It also agreed to pay US$100 million.

In Washington, Congress is considering legislation that would require Google and Apple to allow sideloading, or the practice of downloading apps without using an app store. Google says it already allows sideloading. It would also bar them from requiring that app providers use Google and Apple's payment systems.

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