Google has agreed to pay $1 billion ($US700 million) and make a series of changes to its app store as part of an antitrust settlement in the US.

The tech giant agreed to the settlement with all 50 US states in a San Francisco federal court in September, but the terms were kept secret until the conclusion of a similar lawsuit between Google and Epic Games.

The antitrust lawsuit related to Google’s operation of its Play app store and the use of its own payment systems for in-app purchases on Android devices.

Google takes a commission of between 15 and 30 per cent on all in-app purchases on Android devices, and the lawsuit alleged that this has served to drive up prices for all users.

The prosecutors accused the company of overcharging consumers due to these unlawful restrictions and its practice of stamping out the distribution of apps through other app stores or directly from the developers.

The commissions Google receives from in-app purchases amount to billions of dollars annually, the court heard.

The settlement that Google has agreed to will see it paying ($934 million ($US630 million) into a settlement fund for consumers, and $103 million ($US70 million) into a fund that will be used by the US states.
Eligible consumers in the US will receive around $3 ($US2) and may be eligible for more depending on their spending on the Google Play app store between 16 August 2016 and 30 September 2023.

As part of the settlement, Google did not admit to any wrongdoing in these matters.

The settlement will also see the tech firm make concessions to its app store, including expanding the ability of developers to provide users with alternative billing options for in-app purchases, and efforts to simplify users’ ability to download apps directly from developers.

Google vice-president for government affairs and public policy Wilson White said the settlement “builds on Android’s choice and flexibility, maintains strong security protections, and retains Google’s ability to compete with other (operating system) makers, and invest in the Android ecosystem for users and developers”.

The case was brought forward by all 50 US states, the District of Columbia, Puerto Rico and Virgin Islands. The settlement still requires a judge’s final approval.

Lawyers for the states said the deal will offer “significant, meaningful, long-lasting relief for consumers throughout the country”.

“No other US antitrust enforcer has yet been able to secure remedies of this magnitude from Google,” they said in a statement.

The settlement terms were not released until the conclusion of a lawsuit between Google and Fortnite maker Epic Games in relation to very similar issues.

In that case, a jury unanimously ruled that Google was operating its app store and payments system as an “illegal monopoly” by stamping out competing app stores and charging unjust fees on developers.

Lawyers for Epic Games had argued that Google “suppresses innovation and choice” thanks to a “web of secretive, anti-competitive agreements”.

In response to the US settlement, Epic Games public policy head Corie Wright said it “did not address the core of Google’s unlawful and anti-competitive behaviour”.

In a post on X, Epic Games CEO Tim Sweeney said that the US prosecutors could have secured more damages if “they’d stayed in the fight a few weeks longer”.

Google is also facing a larger antitrust lawsuit in the US over the operation of its search engine, with the tech giant fighting to prevent it being forcibly broken up.

The lawsuit in that case alleges that Google “wilfully maintained, abused and extended” its search engine monopoly by stamping out rivals using techniques like exclusionary distribution agreements with smartphone manufacturers, and by maintaining strict control over its Search Advertising 360 tool.

The US government has argued that Google is “unlawfully” spending billions of dollars annually to ensure vendors such as Apple and Samsung favour its own search engine over its competitors.

According to the prosecutors, the case “strikes at the heart of Google’s grip over the internet for millions of American consumers, advertisers, small businesses and entrepreneurs beholden to an unlawful monopolist”.