Google reportedly offered Netflix a reduced revenue share deal

A new complaint filed Friday by lawyers appointed to represent consumers in a potential class-action lawsuit against Google highlight several similarities between the Play Store and Apple’s App Store.

The new complaint is the latest in several ongoing legal battles with Google, including the Epic Games lawsuit and an antitrust suit filed by several U.S. state attorneys general. The complaint accuses Google of abusing its monopoly power and of anti-competitive behaviour, including offering Netflix a deal on the 30 percent revenue share.

Like Apple and the App Store, Google charges a 30 percent cut of revenue for apps on the Play Store. Simultaneously, Google forces app developers to use its in-app billing system. It’s this relationship that’s at the heart of most of the antitrust arguments against Google (and also Apple).

However, there’s been a general sentiment that Google isn’t as bad as Apple since Android is “open” and people don’t need to use Google’s Play Store — they can pick other stores to get apps. Previous documents from the Epic lawsuit show that that’s really not the case, and this complaint goes further by demonstrating the similarities between the Play Store and the App Store.

Google also tried to woo Netflix with a special deal

Let’s start with the Netflix deal. The complaint details how Netflix and other subscription services like Spotify and Tinder have attempted to get around Google’s in-app billing system. The Verge points out that these attempts led to Google posting a ‘clarification‘ that Play Store apps must use Google’s in-app purchase system. In the complaint, lawyers accused Google of offering Netflix a “significantly reduced revenue share” to keep the company from using an alternative payments system.

A Google spokesperson told The Verge that “all developers are subject to the same policies,” although that’s allegedly not the case (you can read the full statement below). The Netflix deal and Google’s insistence that its policies apply to all developers mirrors similar details revealed in the Apple vs. Epic Games suit. Namely, documents showed that Apple offered Netflix a deal to keep the subscription service using Apple’s in-app payment system, and the iPhone maker even considered taking “punitive measures” against Netflix.

“All developers are subject to the same policies as all other developers, including the payments policy. We’ve long had programs in place that support developers with enhanced resources and investments. These programs are a sign of healthy competition between operating systems and app stores and benefit developers,”  said a Google spokesperson.

Apple also repeatedly argued that it treated developers the same, even after documents revealed in a U.S. Congressional hearing last year outlined a special deal Apple set up with Amazon to get Prime Video on the App Store.

Google could break even on Play Store with a roughly six percent commission

Despite Google’s claims of “healthy competition,” the complaint cites internal Google figures that suggest the company would break even by charging a roughly six percent commission on the Play Store. Further, the complaint quotes internal Google communications that admit the company’s 30 percent fee has “[n]o rationale, other than copying Apple.”

Finally, the new complaint calls out Google’s Play Developer Distribution Agreement, which forbids developers from using information about customers gathered from the Play Store, such as email addresses, to reach customers directly. While it sounds like a fairly basic privacy policy on the surface, the complaint notes it makes it “impossible for developers to directly reach customers to offer alternatives to Google Play Store.”

That’s particularly significant given Apple just made the small concession to let developers contact customers with information about alternative payment options — an improvement, but one that doesn’t go nearly far enough.

Source: The Verge