In order to defend the dominant position of the Play Store, Google reached deep into its pockets. This is evidenced by a document from the legal dispute between Epic Games and Google, which is now unredeemed. Accordingly, Google signed contracts with developer studios and cell phone manufacturers to ensure the supremacy of its Android store.
In which Court document it is a change made by Epic Games to the original statement of claim, which is based on new information from the court hearing. It clearly shows how seriously Google took the threat posed by “Fortnite”: Epic Games first published its popular game outside of the Play Store in order not to have to pay Google’s 30 percent fee for game sales in the Play Store. Google apparently feared that other games could follow this example. Sony, Nintendo, Valve and Blizzard are named as examples in the court document.
Hundreds of millions of dollars for developers
To prevent this, Google is said to have approached developer studios directly: Over 20 of the most successful studios are said to have received money to continue publishing their applications in the Play Store, Epic accuses Google. Documents from Google are said to prove that the company paid several hundred million US dollars to the top developer studios as long as they continue to offer their games exclusively in the Play Store. According to the court document, Tencent is one of the courted studios in addition to Activision-Blizzard.
In one Statement an The Verge Google confirmed this approach. Google is competing with other app stores for the business of developers, said a spokesman. Therefore, Google has long been offering programs that support outstanding studios with resources and investments. This is “a sign of healthy competition” between operating systems and app stores and advantageous for the developer studios.
Special conditions for smartphone manufacturers
According to the court documents, Google has not only ensnared developer studios, but also the manufacturers of smartphones: From 2019, companies such as Samsung, LG and Motorola are said to have received offers to participate in a so-called “Premier Device Program”. Manufacturers were offered various financial benefits as long as they adhered to some regulations.
First and foremost: Devices from the “Premier Device Program” were not allowed to have any other app stores or other programs for installing APKs preinstalled apart from the Play Store. In return, manufacturers should receive 12 percent instead of the usual 8 percent of the search revenues generated with their devices. In addition, according to the document, Google ceded between 3 and 6 percent of the sales generated with the Play Store to participating mobile phone manufacturers. Google is also said to have prohibited participants in this program from sharing such information publicly.
Google’s approach met with varying degrees of acceptance among the various smartphone manufacturers: According to Epic’s lawyers, HMD Global (Nokia), Motorola and LG in particular have made use of the “Premier Device Program”. HMD designed 100 percent, Motorola 98 percent and LG 95 percent of its cell phones in accordance with Google regulations.
The Chinese company BBK, which owns Oppo, Vivo and OnePlus, provided 70 percent of its phones for the Premier program. With Sony it should have been 50 percent, with Xiaomi 40 percent. Samsung is not mentioned in this context – the South Korean company offers its own app store for Android devices with its Galaxy Store.
Securing the Play Store
These incentives should effectively prevent alternative app stores from becoming a real threat to the Play Store – Google managers are said to have seen the program as a complete success, Epic’s lawyers write. How seriously Google saw the threat posed by the “Fortnite” developer is shown by a further allegation from the legal dispute that became known at the beginning of August: According to this, Google is said to have even considered buying Epic Games. These measures were also a direct reaction to the publication of “Fortnite” outside the Play Store.
The Play Store is an important source of revenue for Google: The company retains between 15 and 30 percent of all revenue from apps that are sold through the Play Store. That includes in-app purchases. According to the analysis company SensorTower Users are said to have spent over 38 billion US dollars on the Play Store last year, over 10 billion US dollars of that amount to Google. Should the dominance of the Play Store on Android devices be undermined, this would have a direct impact on Google’s sales.
Epic and Google are arguing in court about the openness of the Android store Play Store. The “Fortnite” developer accuses Google of undermining the competition of app stores on the Android operating system with its business practices and of squeezing developer studios with its commission. Google takes the line that Android is an open platform because you can basically also download apps from other stores. Epic is making similar allegations against Apple.