The information released highlighted Google’s strategies to solve the problem that arose last year when a payment system allowed Fortnite users to pay directly to developer Epic Games.
Epic Games won a lengthy side battle in the US District Court of Northern California on August 19 to unseal its antitrust lawsuit against Google. Since then, it has published the unprocessed lawsuit, Politico reported. Google fought disclosed the redacted parts according to a Reuters report and complained about his lawyers that Epic was infiltrating the redacted parts it requested by including information from the redacted parts of the complaint in other public notices. Eventually, however, the complaint was not dealt with and MediaNama received both versions of the document for comparison.
The Fortnite developer sued Google (as well as Apple) for allegedly forcing it into a payment system in which the tech giants cut off individual transactions. Epic’s complaint against Google goes into detail about its strategies for dealing with competitive threats, both on the Play Store and in general. You can read our report on the initial complaint here. In this report, we’re going to look at some of the new information that adds color to Epic’s complaint against Google.
The outcome of the complaint could have significant antitrust implications, including in India, where the Indian Competition Commission is already reviewing the Play Store. Information made public in this lawsuit will be available to investigators in India and other markets where the dominance of big tech companies is increasingly being called into question.
“Considering Buying Epic”
- Google considered buying Epic: “Google uses its size, influence, power and money to induce third parties to enter into anti-competitive agreements that further consolidate its monopolies. For example, Google has gone so far as to share its monopoly profits with business partners in order to secure their agreement to foreclose competition, has developed a number of in-house projects to combat the “contagion” caused by the efforts of Epic and others Offering consumers, perceived and developers competitive alternatives, and has even considered buying some or all of Epic to help quell this threat, ”revealed Epic’s filing. (This disclosure came in a less, but still somewhat redacted, version of the complaint that was released earlier this month. This list includes all of the disclosures that were redacted in the original complaint.)
- Extortion from phone manufacturers: Epic said internal Google docs showed the company was putting pressure on phone manufacturers (OEMs) to shut down the Play Store only App marketplace that came with the phone. “Google’s documents show that OEMs are pushing not to make Google Play the exclusive app store on OEMs’ devices,” says a previously edited section. “Google built these contractual competitive barriers to the distribution of Android apps in the knowledge that Google would lose billions of dollars if the distribution of Android apps were opened to competition and rival Android app stores, including an ‘Epic Store “,” win “would have full traction.”
- Feared “contagion”: Google reportedly feared a ripple effect due to a deal Samsung signed with Epic to distribute Fortnite. “Google feared a so-called“ risk of infection ”resulting from the fact that more and more app developers are not using Google Play. Google feared that the “contagion” would spread in this way: Initially inspired by Epic’s example, “[p]High-performance developers “like Blizzard, Valve, Sony, Nintendo” – creators of some of the most popular and profitable entertainment programs – might “be able to get started on their own and bypass Play by distributing their own apps directly. […] Google calculated the entire endangered turnover from the threatened loss of market share in the sale of Android apps at 3.6 billion US dollars, ”it says in the complaint.
- Making apps harder to install: “Google Play executives have recognized that downloading Fortnite directly from a source other than Google Play is” a terrible experience, “and developers like Epic should” fear that most won’t go through the 15+ steps “”, another previously edited part of said the complaint.
While Android appears theoretically more open than iOS (as regards the approval of third-party app stores), the efforts cited in the complaint appear to be aimed at protecting the exclusivity that Apple’s app store enjoys by simply banning other marketplaces that sell apps, achieved. . “Under these exclusivity agreements, Google undertakes to share the monopoly profits that Google generates from its search business (and in some cases from the Play Store itself) with the OEMs in exchange for these OEMs’ agreements not to pre-install alternative app stores “Said Epic in another, unedited part. Google has entered a “premier” tier of agreements with OEMs effectively prohibiting their Android devices from “having apps that other apps can install,” which translates into competing app marketplaces.
In the section where Epic describes “side deals” that Google offered to game developers to allay their concerns about the Play Store’s limitations, the exposed part shows that this was such a coordinated strategy that it even gave it an internal name would have:
Google has preferential agreements with major mobile app developers like Activision Blizzard. as part of an initiative that Google originally called Project Hug and is now called Apps and Games Velocity Programs. These deals allow Google to keep its monopoly behavior publicly unchallenged. (Part in bold was previously edited; italics by us)
Google Play is dominant, and Google knows it: In another redacted part, Epic has used Google’s own words against itself to undermine any argument the company could make to say the Play Store is facing significant competition:
An internal Google report from 2017 confirmed that “[the Google] Play Store dominates in all countries, “including the US. Google recognized that in one quarter (June to September 2016), app installs through channels other than Google Play (including direct downloads and competing app stores) represented only 4.4% of Android app downloads in the United States. – Unprocessed Epic Lawsuit
“Will always compete, work with Apple”: Google co-founder Larry Page once had a meeting with the late Apple CEO Steve Jobs where he apparently said, “There will always be places we” [Google and Apple] compete and places we work together. ”(This was quoted in a reference to Google’s deal with Apple to use its search engine as the default for Apple’s web browser and Siri voice assistant.)“ Our vision is that we as one company work, “noted from another Google Apple meeting received revealed by Epic.
Consider getting epic shares of Tencent
Significantly, Google internally considered trying to stop Epic’s attempts to distribute Fortnite outside the Play Store by contacting Tencent to buy the Chinese company’s stake in the developer. While that didn’t reach Google’s other option of fully acquiring the company, it’s an interesting potential tactic:
Google has realized that Epic may not accept its offer [for a better revenue split on in-app purchases]. “As a potential alternative,” suggested a senior Google manager. Google “is considering reaching out” to Tencent, a company that owns a minority stake in Epic, “to either (a) buy Epic shares from Tencent in order to gain more control over Epic.”“Or” (b) Partner with Tencent to Buy 100% of Epic “. Another Google executive suggested that Google Play / Android and [not] Allow sideloading (or make sideloading very difficult (political position or even architecture) – difficult move given the EU decision, but we have good privacy / security arguments about why sideloading is dangerous for the user) ”- unresolved Epic complaint
Try downsizing the Samsung Galaxy Store
Google has tried to pay Samsung to downsize the Galaxy Store, which ships on the Korean phone maker’s devices, in an effort the company originally referred to as “Project Banyan”.
A Google employee said: “Samsung’s duplication of our services on Android is one of the critical issues of the partnership right now. Samsung Apps compared to Google Play is one of the most noticeable. […] Documents submitted by Google Epic show that Google has a “[i]Custom surgical deal”With Samsung, in which Google would, among other things, ensure” game protection “and in return Samsung would give a” share of the rotation of browsers and assistants “, a percentage of” the share of play of the rotation “. [in-app purchases] powered by Google “and” Billing integrations for App Gallery “- unresolved Epic complaint
The Galaxy Store remains preinstalled on Samsung devices.
Do you have anything to add? Post your comment and give someone a MediaNama as a gift subscription.