(Bloomberg) – A federal judge is skeptical of Alphabet Inc.’s $700 million settlement with states and consumers to resolve allegations that the Google Play app store abuses its market power. It seems so.
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At Monday’s hearing, U.S. District Judge James Donato said the agreement offers consumers short notice, both in terms of the overall coverage it provides and the broad immunity it gives the company from future lawsuits. He said it seemed like he was giving them the right.
“Right now, I’m not saying this is a bag of nothing, but it’s a bag that’s not great,” Donato said.
The agreement, first revealed in December, resolved antitrust claims brought by state attorneys general and consumers. In addition to monetary payments, the settlement also calls for changes to Play Store policies to reduce barriers to competition in the app distribution and payment processing markets. But the agreement has been criticized for allowing Google to continue collecting large service fees from app developers.
State officials said in a complaint filed in 2021 that Google used illegal tactics to stifle competition and ensure developers had no choice but to go through the Play Store to access users. he claimed. A separate class action lawsuit representing approximately 21 million consumers accuses Google of inflating the prices of Android apps by taking up to 30% of Google Play transactions.
The lawsuit threatened billions of dollars in revenue generated by the sale and distribution of apps through Google Play.
Donato told attorneys representing the state AG at the hearing that the proposed settlement would require 127 million class participants to effectively waive their Google Play Store claims for the next seven years. started.
“The damages you are proposing to pay on these claims seem very extensive,” Donato said.
Read more: Alphabet and states reach $700 million deal in Google Play fight
When Google’s lawyers countered that the release was necessary to prevent the company from being sued again for the same conduct soon, Donato said, “If you’re going to do the same thing over and over again, why is it not right for you?” “Is that true?” he said. To be sued? ”
He also criticized the financial value of the settlement. Lawyers for each state said each user would receive at least $2, with heavy users receiving thousands or even tens of thousands of dollars. Donato said more clarity is needed on how the settlement money will be distributed.
“It seems to me that as a matter of basic arithmetic, no one person is going to benefit much,” Donato said.
Donato also said the proposed settlement makes no mention of service fees charged by Google.
“Does your contract tell these 127 million consumers that they can’t sue if they don’t like Google’s prices?” Donato asked the lawyer.
At the end of the hearing, the judge gave attorneys for both sides 30 days to demonstrate why the settlement is fair, reasonable, and sufficient.
Google lost a similar lawsuit by Fortnite maker Epic Games last year, but Google and Epic have not yet disclosed what remedies they would offer in that case.
The case, Google Play Store Antitrust Litigation, 21-md-02981, is filed in the United States District Court for the Northern District of California (San Francisco).
–With assistance from Leah Nylen.
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