Epic Games’ objections to Google’s business practices became clearer on Thursday with the release of previously redacted accusations in the gaming giant’s lawsuit against the internet goliath.
Those accusations included details of a Google-run operation dubbed Project Hug that aimed to sling hundreds of millions of dollars at developers to get them to remain within Google Play; and a so-called Premiere Device Program that gave device makers extra cash if they ensured users could only get their apps from the Play store, locking out third-party marketplaces and incentivizing manufacturers not to create their own software souks.
As part of the litigation, Epic made some accusations under seal last month [PDF] because Google’s attorneys designated the allegations confidential, based on Google’s habit of keeping business arrangements secret.
But on Wednesday, Judge James Donato issued an order disagreeing with Google’s rationale and directing the redacted material to be made public.
“Google did not demonstrate how the unredacted complaints might cause it commercial harm, and permitting sealing on the basis of a party’s internal practices would leave the fox guarding the hen house,” the judge wrote [PDF].
The unredacted details, highlighted in a separate redlined filing [PDF] and incorporated into an amended complaint filed on Friday [PDF], suggest Google has gone to great lengths to discourage competing app stores and to keep developers from making waves.
For example, the documents explain how Google employs revenue-sharing and licensing agreements with Android partners (OEMs) to maintain Google Play as the dominant app store. One filing describes “Anti-Fragmentation Agreements” that prevent partners from modifying the Android operating system to offer app downloads in a way that competes with Google Play.
“Google’s documents show that it pushes OEMs into making Google Play the exclusive app store on the OEMs’ devices through a series of coercive carrots and sticks, including by offering significant financial incentives to those that do so, and withholding those benefits from those that do not,” the redlined complaint says .
These agreements allegedly included the Premiere Device Program, launched in 2019, to give OEMs financial incentives like 4 per cent, or more, of Google Search revenues and 3-6 per cent of Google Play spending on their devices in return for ensuring Google exclusivity and the lack of apps with APK install rights.
Google’s highest level execs, it’s claimed, suggested giving Epic Games a deal “worth up to $208m (incremental cost to Google of $147m) over three years” to keep the game maker compliant. And if Epic did not accept, the court filing alleges, “a senior Google executive proposed that Google ‘consider approaching Tencent,’ a company that owns a minority stake in Epic, ‘to either (a) buy Epic shares from Tencent to get more control over Epic,’ or ‘(b) join up with Tencent to buy 100 per cent of Epic.'”
The filing contends that in 2019 Google’s internal estimate was that the company could lose between $1.1bn and $6bn by 2022 if Android app stores operated by Amazon and Samsung gain traction. The Epic Games Store, it’s said, could have cost Google $350m during that period.
And this kind of nasty pressure is how monopolies strongarm their dominance
Court documents reveal that LG, Motorola, and HMD Global, which makes Nokia phones, are part of the Premier Device Program. Premier devices are effectively mandated to make Google’s services the “defaults for all key functions” for up to 90% of the manufacturer’s Android phones. This includes blocking apps with the ability to install APKs on the device, except for the app stores designed for and managed by the respective original equipment manufacturers (OEMs). In turn, Google promised a higher cut of search revenue earned on the device, raising the rate from 8% to 12%, which is not an insignificant increase. In some instances, Google also agreed to share up to 6% of the “Play spend” revenue from the Play Store, essentially how much money that phone made for Google based on the user’s interactions.
In addition to the other brands mentioned above, Xiaomi, Sony, Sharp, and BBK Electronics, which owns OnePlus, and overseas brands like Oppo and Vivo, were all involved in the program in varying capacities. Google even had contracts with carriers to dissuade them from launching app stores that would compete with Android’s app marketplace—explicitly demonstrating deep pockets prevent competition and innovation.Source: Epic Court Documents Show How Google Pays Competitors to Not Compete – Gizmodo