Google has reached a settlement in an antitrust case filed by state attorneys general, agreeing to pay $700 million and make several concessions regarding its Android app store. The terms of the settlement were disclosed in documents filed in San Francisco federal court, revealing that $630 million will go towards compensating U.S. consumers who were allegedly charged higher prices for digital transactions within apps downloaded from the Play Store. The settlement also includes $70 million in penalties and other costs that Google must pay to the states.

The allegations against Google revolve around its commission system, which charges fees ranging from 15% to 30% on in-app purchases, similar to Apple's iPhone app store. State attorneys general argue that these fees drove up prices, as there was no open market for payment processing. The commissions generated billions of dollars in profit for Google annually, according to evidence presented in a recent trial focused on its Play Store.

As part of the settlement, Google has agreed to make changes to its app store practices. It will make it easier for consumers to download and install Android apps from sources other than the Play Store, and will reduce the number of security warnings displayed when alternative choices are used. Android app developers will also have more flexibility to offer alternative payment choices to consumers, rather than having transactions automatically processed through the Play Store's commission system. Additionally, apps will be able to promote lower prices available to consumers who choose an alternate payment processing method.

The settlement has been hailed as a victory for Android users by Washington D.C. Attorney General Brian Schwalb, who stated that Google's anticompetitive practices deprived users of choices and forced them to pay artificially elevated prices. Google's Vice President of Government Affairs and Public Policy, Wilson White, sees the settlement as a positive for the company, as it maintains choice and flexibility for Android users while allowing Google to compete with other software makers and invest in the Android ecosystem.

While the settlement is seen as a huge win for consumers by state attorneys general, it did not satisfy Epic Games, the maker of Fortnite, which filed an antitrust lawsuit against Google in August 2020. Epic Games chose to take its case to trial instead of accepting the settlement, even though it had already lost on most of its key claims in a similar trial targeting Apple's iPhone app store. However, the recent trial against Google resulted in a unanimous verdict that the company had engaged in anticompetitive practices with its Play Store.

The outcome of the trial raises the possibility of Google being ordered to pay even larger penalties and make more significant changes to its Android app ecosystem. The details of these changes will be determined by U.S. District Judge James Donato, who presided over the trial. Donato will also need to approve the settlement between Google and the states.

In addition to the settlement related to its app store practices, Google faces another antitrust case targeting its dominant search engine. The trial, brought by the Justice Department, is scheduled to conclude with closing arguments in early May. The outcome of this case could have further implications for Google's business practices.