Google and Epic reach settlement in antitrust lawsuit

Google and Epic have been fighting a court battle for the past five years, but the end could be in sight. Epic sued Google in 2020, alleging that the company was was abusing its power over the Android ecosystem to make it difficult for developers to use third-party app stores or billing systems, among other things.

Epic has been on a winning streak, with courts largely siding with the game maker. And in October Google opened the Play Store up to 3rd-party payments pending an appeal to the Supreme Court. So it’s a little surprising to learn that Google and Epic have agreed to a settlement that could bring the entire case to a close.

The two companies have submitted the settlement to the judge overseeing the case – he still needs to sign off on it before it becomes official. But the agreement is basically an amendment to the judge’s last order, so it seems like there’s a good chance that could happen.

If the settlement is approved, Google has agreed to make the following changes to the Play Store:

• Google will not share Play Store revenue with any app stores.
• The company will cannot enter into any exclusivity agreements to have apps or games launch first or exclusively in the Play Store (although Google can negotiate to have apps launch first of exclusively for Android before they’re available for iOS).
• Google cannot require apps distributed via the Play Store to have all the same features as those distributed via other channels.
• Google can still require phone makers or carriers to preinstall the Play Store, but the company will be prohibited from preventing them from also installing third-party app stores.
• Google will make it easier for users to download and install third-party app stores… but they’ll have to be “Registered App Stores.”

That last bit helps explain why Google agreed to this settlement after fighting against Epic in court for years. Obviously Google wants to maintain control over its software ecosystem for both security and business reasons, and requiring third-party app stores to register with Google helps the company retain at least some of those things.

According to the settlement:

To address Google’s view that app and app store downloads could be used by bad actors as a vector for fraud or malware, the parties have also agreed that Google may apply specified neutral safety and security criteria to review stores for certification as Registered App Stores. That process is conceptually similar to a remedy proposed by Epic’s expert at trial… Google will be permitted to charge reasonable fees to cover the operational costs of this review process.

Those fees would be capped at 20 percent for “in-app and linked purchases in games” including loot boxes and other random outcomes, as well as purchases that have a major impact on game play such as purchases that will increase your power level and/or help you progress through a game more quickly.

Service fees are capped at 9 percent for other in-app and linked purchases. For games this could include subscriptions, content, levels, events, or cosmetic items. For non-games, this cap applies to just about everything else.

And actual fees will likely be a little higher than that, because for apps that do use Google Play billing, Google will take another 5 percent. Third-party billing systems will also likely take a cut.

This proposed billing changes and “Registered App Store remedy” would be in place at least through 2032, and the settlement asserts that it would help increase competition “while also ensuring the safety and security of Android users.”

Billing changes could roll out later this year, while users will probably have to wait for Android 17 to arrive next year before the new Registered App Store system is available.

Perhaps the most surprising thing about the settlement? It applies globally, and not just in the United States. So if the judge approves the agreement, Google could open up the Play Store for developers and users around the world without facing further litigation on a country-by-country basis.

That said, it’s not like Google isn’t facing plenty of other antitrust litigation around the world.

via Ars Technica, The Verge, Hacker News, Reuters, Sameer Samat, and Tim Sweeney