By Vishala Sri-PathmaBusiness reporter

Google will allow developers on its Play app store to offer direct payment options to users to settle an antitrust case in the latest regulatory row over the tech giant's practices.

It will also pay $700m as part of the lawsuit, which was brought by a group of US states.

They accused Google of quashing competition to its Play Store on Android devices.

The settlement was announced in September, but the terms were not.

Google also said it would make it easier to download apps on Android devices from sources other than its Play Store.

The tech giant was also accused of overcharging customers through unnecessary fees for in-app transactions.

The settlement proposed that Google should pay $630m into a fund for consumers and $70m into a fund that will be used by states.

These funds are pending final legal approval.

Eligible customers will receive at least $2 and may be able to receive additional payments based on their spending patterns on Google Play between August 2016 and September 2023.

"This settlement builds on Android's choice and flexibility, maintains strong security protections and retains Google's ability to compete with other OS makers and invest in the Android ecosystem for users and developers," said Wilson White, Google vice president of government affairs, in a statement.

Much criticism has been levied at the tech giant in recent years, with market players accusing Google of abusing competition practices and behaving like a monopoly.

This latest settlement is one of many concessions in regards to its app store, which has come under a lot of scrutiny.

Unnecessary fees for customers

The Google Play Store is one of two main marketplaces for mobile apps alongside Apple's App Store.

However, the way it charges developers and customers has drawn complaints from users.

For example, Google charges app makers a 15% fee for customer payments for app subscriptions and up to 30% for purchases made within popular apps that are downloaded from the store.

The settlement will mean a reduction in those fees when app makers handle their own transactions, although customers would not necessarily see a cut in fees because app developers could pocket the discount.

It will also allow developers to show different pricing options when users make a purchase.

The announcement of the terms of the settlement comes after Epic Games, the maker of popular game Fortnite, won a related case against the tech company last week.

Google faces other lawsuits challenging its search and digital advertising practices.

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