Google agrees to $700 million settlement of app store legal case - though concessions on app rules criticised for being too narrow

Google will further evolve its rules around in-app payments on Android devices as a result of a massive $700 million settlement of a competition law action that involved Attorney Generals of every US state.

Josh Stein, the Attorney General of one of the states that led on the action, North Carolina, told Reuters that the changes Google will have to implement "will result in more innovation among app developers and lower prices for consumers, and that was always our number one goal".

Both Google and Apple have faced lots of criticism regarding the rules they force on companies that operate apps on Android and iOS devices. Most criticised are the rules that force some app-makers to use Google and Apple’s own commission-charging transaction systems when taking in-app payments.

In the music industry, Spotify has been particularly vocal on all this. It actually reached a deal with Google that allows it to take in-app payments via its own transactions system. Meanwhile, with Apple, the music service put pressure on competition regulators around the world to force a change to the rules, especially in the European Union where a decision on a long-running investigation is expected in the new year.

Fortnite maker Epic Games, also very vocal in this domain, sued both Apple and Google in the US courts. In the Apple case, a judge mainly sided with the tech giant, although did say that under Californian law Apple should allow Epic to link to alternative payment options from its iOS app. The Google case went before a jury which sided with Epic earlier this month.

In the action led by the US states, Reuters explains, "Google was accused of overcharging consumers through unlawful restrictions on the distribution of apps on Android devices and unnecessary fees for in-app transactions. It did not admit wrongdoing".

A settlement was actually reached in September, but publication of the deal was held off pending the Epic court case. Google will pay $630 million into a settlement fund for consumers and $70 million into a fund that will be used by the states. Over 70 million American consumers are likely due compensation, so the money received by each person will be relatively modest despite the massive total pay out.

Of more interest to app-makers are the commitments Google has made to change its app rules, including around in-app payments. However, critics argue that the changes are not actually that radical, and - with in-app payments - Google will simply extend the 'user choice billing' scheme it has already been piloting.

It was under that scheme that Spotify was able to start taking in-app payments on Android devices again, providing Google Pay is also an option. In the Epic court case it was revealed that Spotify secured very good terms as part of that scheme. However, other app makers are not being offered any where near as good a deal, meaning Google will still get a decent cut of any money even when third party transaction systems are used.

Epic boss Tim Sweeney said on Twitter: "The state attorneys general settlement is an injustice to all Android users and developers. The settlement endorses Google's 30% monopoly rent imposition, by replacing the anticompetitive Google Play billing tie with a new anticompetitive Google-imposed 'user choice billing' tie which adds a useless 26% Google tax for payments they don’t process".