Epic Court Documents Show How Google Pays Competitors to Not Compete

Epic Court Documents Show How Google Pays Competitors to Not Compete
As more documents are brought to court in the case of Epic v. Google, there is more evidence of the search giant's anti-competitive streak. (Photo: Lionel Bonaventure, Getty Images)

For a platform long heralded for being open and promoting choice, the tea spilled from the unredacted documents presented in the Epic v. Google case reveals the search giant has an anti-competitive side.

Despite the ability to side-load and install apps from third-party sources, Google shopped around a “Premier Device Program” with Android device manufacturers to keep its Play Store as the dominant app store. Google did the same with game developers in a separate program, offering significant financial incentives to keep titles available on its app store.

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.

Google had a similar incentive-based program for game developers, initially called “Project Hug,” though it’s now called the Apps and Games Velocity Program. The idea behind it was to “hug developers close and show love” and “throw extra love/promotion to top developers and games.” Google paid those game developers hundreds of millions of dollars to ensure their games were available on the Play Store.

Epic Games alleges that Google forged the program out of concern that other game companies would follow suit with its launch of Fortnite on Android devices. Epic originally released Fortnite outside of the Play Store to forego the 30% revenue share. But Google didn’t like that. A report referenced in the documents shows Google Play’s finance team had raised concerns that Epic would start a movement within the industry and convince other OEMs to court preinstalled app stores and downloaders that would compete with the Play Store.

Google had estimated that a separate Epic Games Store on Android would have resulted in a loss of revenue to the company of up to $US1.4 ($2) billion by 2022. If Amazon and Samsung’s app stores had followed suit, gaining “full traction” and making as much money as Epic could make, the losses could grow up to $US6 ($8) billion. That’s nearly the equivalent of 22 anti-trust fines paid to the European Union.

Google told The Verge that it’s long had programs of these sorts to support its “best-in-class” developers. “These programs are a sign of healthy competition between operating systems and app stores and benefit developers tremendously,” said Google spokesperson Peter Schottenfels.

To its credit, Google isn’t doing anything that Apple and Amazon haven’t attempted, at least in terms of encouraging developers to distribute apps through its mobile platform. But Epic’s case against Google is certainly buffing out the veneer that the company is committed to openness on its mobile platform.

You can read the full documents covering these programs below in the unredacted documents provided by Epic.