Google will pay $90 million to resolve a legal dispute with app creators

According to a court filing, Alphabet Inc’s (GOOGL.O) Google has agreed to pay $90 million to settle a legal dispute with app developers over the money they made producing programs for Android smartphones and luring users to make in-app purchases.

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

As part of the proposed settlement, Google stated in a blog post that it will invest $90 million in a fund to assist app developers with annual sales of $2 million or less from 2016 to 2021.

“The great majority of US developers who earned revenue through Google Play will be eligible to receive money from this fund, if they wish,” Google wrote in a blog post.

Google also stated that it would charge developers a 15% commission on their first million dollars in earnings from the Google Play Store each year. It began doing so in 2021.

According to Hagens Berman Sobol Shapiro LLP, who represented the plaintiffs, there were approximately 48,000 app developers eligible to apply for the $90 million funds, and the minimum compensation is $250.

Apple Inc (AAPL.O) agreed last year to relax App Store rules on small developers as part of a class action settlement. In addition, it agreed to pay $100 million. more info

Congress is debating legislation that would require Google and Apple to allow sideloading, or the practice of downloading software without using an app store, in Washington. According to Google, sideloading is already possible. It would also prevent them from mandating app developers to utilize Google or Apple’s payment systems.