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During the Epic v. Google trial period, it was revealed that Spotify wasn’t the only one that negotiated with Google for special treatment. The streaming service Netflix also secured a special discounted rate, according to documents and testimony presented. In 2017, Netflix was offered a rate that meant the company could retain 90 percent of the in-app payments on the Android platform. The agreement pertained to Google’s billing system, which Netflix had previously been using.
The issue of how app stores operate and the allegations of monopolistic practices have been hotly debated, especially in the context of the Google Play Store and its impact on the Android operating system as a whole. Epic Games, the publisher of the popular game Fortnite, sued Google in 2020 claiming that the Google Play Store’s policies around in-app purchases were monopolistic. Google, on the other hand, has argued that adhering to certain standards and practices is essential for maintaining a secure user experience and ensuring that the Android platform can compete with Apple’s iOS.
This legal battle has brought to light significant revelations about the dealings between Google and major companies such as Netflix and Spotify. During a sworn video deposition, a Netflix executive revealed that Google had once offered the company a special deal to switch to Google Play Billing voluntarily, which would have resulted in a reduced fee of 10 percent for Netflix. However, Netflix declined the offer, ultimately choosing to discontinue in-app subscriptions via the Google Play Store.
Netflix’s reasons for rejecting the deal included concerns that it would not be financially viable for the company, particularly as it anticipated a potential loss of around $250 million. This revenue projection was based on assumptions regarding the comparison between in-app Google Play payments and subscription sign-ups via a mobile browser. Netflix expressed skepticism about Google’s payment system, indicating that it would likely not match the company’s own in-house subscription model in terms of performance.
Google did not challenge Netflix’s assertions during the deposition, choosing instead to highlight the widespread availability of the Netflix app on a variety of devices, some of which do not require the use of the Google Play Store. Additionally, it was revealed that Netflix had a “unique arrangement” with Apple to share only 15 percent of its revenue on iOS, half of Apple’s standard rate.
In consideration of all these revelations, it is clear that major companies in the digital content industry have engaged in negotiations with Google and other tech giants to secure favorable terms. Although the specific terms agreed upon between Spotify and Google were not disclosed during the trial, it is evident that these deals have wide-ranging implications not only for the companies involved but also for the broader ecosystem of app stores and digital platforms. As the legal battle between Epic and Google continues, it will be important to closely monitor the outcomes and implications for the future of app store policies and practices.
