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 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 agreement, which is subject to tribunal approval. About £160mn has been earmarked for UK developers, 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 Professor Barry Rodger, who had sought as much as £1bn in compensation. Payouts are expected to vary, from a £200 flat-rate sum for the smallest developers to several million pounds for larger peers. Alphabet said it was "pleased to reach an agreement" and remained committed to supporting the UK developer community.

A series of UK class actions, many against Big Tech, have been brought under legislation introduced a decade ago, but few have resulted in payouts. Last year, claimants in a case against Apple secured an important win at the tribunal over similar App Store charges.