Class-action lawsuit in Play Store alleges that Google offered Netflix a special rate

An antitrust lawsuit filed against Google and its Play Store by several state attorneys general echoed the Epic vs. Apple battle, and a new document shows how and why Google’s app store is so similar. MLex senior correspondent Michael Acton points to the new complaint, who arrived Friday evening from lawyers appointed to represent consumers (that’s us) in a potential class action lawsuit where the states and Epic Games accuse Google of abusing its monopoly and anticompetitive behavior.

Image: MLex, CONSOLIDATED COMPLAINT OF FIRST AMENDED CLASS ACTION, CASE NO. 3:20-CV-05761-JD – 42

Perhaps most telling is a statement that popular subscription services like Spotify, Netflix and Tinder have been trying to find ways to bypass Google Play billing and cut that 30 percent. This is no secret, as the direct collection of credit card information by Netflix and Spotify Reportedly resulted in the posting of a “clarificationexplain that Play Store apps must use Google’s billing system and give them a year to change. In this filing, the lawyers accuse Google of offering Netflix a “significantly reduced revenue share” with the clear intention of nullifying its desire to use an alternative payment system.

While we haven’t seen the details or timing of this alleged pitch, it’s a direct reflection of things we learned in the Epic vs. Apple trial, where Apple emails show it offered a range of sweeteners to keep Netflix on its in-app purchase system.

In a statement to The edge, a Google spokeswoman said: “All developers are subject to the same policies as all other developers, including payment policies. We have long programs 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.” Whether that’s a sign of healthy competition is questionable, as Google’s efforts are largely in line with Apple’s, including halving the share price. commission on subscriptions after one year, though it goes further by offering developers a 15 percent discount on their first $1 million in profit.

Google’s standard 30 percent commission is still a prime target, as the lawsuit cites internal Google figures that suggest the breakeven level for revenue sharing is in fact about six percent. The complaint cites internal Google communications admitting that setting the “random fee” at 30 percent”[n]o rationale, other than copying Apple.” And as for the competition, the lawyers cite Google’s estimates that even a major player like Samsung managed only $100 million in revenue in 2019, while Google brought in about $4 billion.

Google’s Response to the State AGs in June said the Play Store “offers more openness and choice than others,” and that on Android, you “can choose to download the app from a rival app store or directly from a developer’s website.” However, this submission also makes holes in that argument, pointing out that Google’s OEM agreements with phone manufacturers interfere with making other app stores as easily accessible as the Play Store, requiring them to be included on a device’s home screen to pre-load Google apps like Gmail and Google Maps.

For apps distributed through the Google Play Store, Google imposes multiple anti-competitive restrictions in its DDA with app developers.  First, it prohibits developers from distributing outside of Google Play to their existing customers, either by (1) using customer data to contact them directly or by (2) moving those customers within the app to another store or to run the developers' own website.

Image: MLex,CONSOLIDATED FIRST AMENDED CLASS ACTION COMPLAINT, CASE NO. 3:20-CV-05761-JD – 53

In a timely call, it cites the Google Play developer distribution agreement that prohibits developers from using information about customers they get from the Play Store, such as email addresses, to reach them directly. You can read the relevant section below.

4.9 You will not engage in any activity with Google Play, including making Your Products available through Google Play, that disrupts, disrupts, damages, or provides unauthorized access to any third party’s devices, servers, networks or other property or services, including, but not limited to, Google or an authorized provider. You may not use user information obtained through Google Play to sell or distribute Products outside of Google Play.

That makes it “impossible for developers to reach customers directly to offer alternatives to Google Play Store,” the suit said. Allowing developers to use information from the App Store to contact customers with emails, including information about alternative payment options, is one of the minor concessions Apple made in its proposed class action settlement earlier this week, although companies like Spotify and Epic say it won’t. almost far enough.