Alphabet agrees to pay £260mn to settle UK class action lawsuit

Alphabet, Google’s parent company, has agreed to pay £260mn to settle a UK class action lawsuit claiming the technology giant levied “unfair” charges on software downloaded from the Google Play app store.

The case, brought at the Competition Appeal Tribunal, alleged Google abused a dominant market position to impose excessive commissions on developers who devised apps used on mobile devices powered by the company’s Android operating system.

The settlement, reached ahead of a 10-week trial that was due to begin next month, represents a limited breakthrough for claimants in UK class action cases.

Alphabet did not admit liability as part of the £260mn settlement, which is subject to approval by the tribunal.

About £160mn has been earmarked for UK developers if the tribunal approves the agreement, with the remaining £100mn to cover litigation funding, legal fees and other expenses.

The case was financed by litigation-funding firm Bench Walk and spearheaded by legal academic Professor Barry Rodger, who had sought as much as £1bn in compensation on behalf of app developers.

In a statement on Thursday he said the settlement was a “great deal” for thousands of developers, who had “little choice but to pay Google’s commission”.

“If approved, meaningful financial compensation will become available for businesses that could never have taken on a company like Google alone,” Rodger added.

Thousands of developers are expected to be eligible for some form of compensation via the Alphabet settlement, although the amount each is in line for will depend on their size.

Payouts are expected to vary massively, from a £200 flat-rate sum for the smallest developers to several million pounds for a limited number of larger peers.

Alphabet said in a statement: “We are pleased to reach an agreement with the developers to end this litigation, subject to court approval. We remain committed to supporting the UK developer community in building the next generation of digital experiences.”

A series of UK class action cases, many of them against Big Tech groups, have been brought under legislation introduced a decade ago that brought US-style litigation to Britain, but hardly any have resulted in payouts.

Several have been bogged down by protracted legal arguments over process, and the compensation that has been awarded so far has largely been regarded as disappointing.

However, claimants in a case against Apple secured an important win last year, when the Competition Appeal Tribunal found that the company levied excessive charges on developers who produced software downloaded from its App Store.