Google agrees to $90 million settlement with app developers

Alphabet's Google Inc. will pay $90 million to settle with app developers who argued Google used agreements with smartphone makers to shut them out of various revenue streams.

Why it matters: The settlement, announced yesterday, marks a victory for app makers accusing Google and Apple of app store dominance, arguing their platforms are anticompetitive.

• In 2021, developers got a $100 million settlement from Apple for similar claims. Epic Games also took Apple to court accusing it of App Store dominance.

What they're saying: "We think this pair of settlements sends a strong message to Big Tech: the law is watching, and even the most powerful companies in the world are accountable when they stifle competition," said Steve Berman, an attorney with Hagens Berman law firm who represented the Android developers in this case, said in a release.

• "We remain confident in our arguments and case, but this settlement will avoid protracted and unnecessary litigation with developers, whom we see as vital partners in the Android ecosystem," Google vice president of government affairs and public policy Wilson White wrote in a blog post.

How it works: As part of the settlement, which has to be approved by a judge, the $90 million will go to a fund to support app developers who made $2 million or less in revenue from 2016-2021.

• Per the Hagens Berman release, Google will allow developers "to pay a reduced 15% service fee on their first $1 million in annual revenues until at least May 25, 2025, down from its 30% prior rate."

The big picture: Apple and Google have been under pressure globally to give app developers more freedom to allow in-app purchases and to sell their apps outside of the Android and iOS app stores.