Google has been accused of bending its own rules by offering special discounts to a few big customers to ensure that they continue to use Play Store platform. As reported by The Verge, a document from a newly unsealed class-action lawsuit reveals that the company offered video streaming firm Netflix an exclusive deal to quell its 'displeasure' over the Play Store commission. As part of the deal, Google reportedly agreed to take a significantly reduced revenue share from Netflix's Play Store revenue.
1 - Says Google offered @netflix special deal to stop them griping about 30% fee
2 - Says Google estimated @SamsungUS made £0.1 bn from store in 2019 compared to Google's £4bn-- Michael Acton (@MActon93) August 27, 2021
The report also claims that platforms like Tinder and Spotify were also looking for payment alternatives to circumvent Play Store's billing system, but they were not offered the sort of secret deal that Netflix received. Prior to this, there were reports of Apple offering an exclusive deal to Netflix to retain its account on the App Store payment system. As part of the deal, Apple reportedly offered Netflix deals like Apple TV bundle, video partner programme, in-depth performance data, email promotions by Apple and promotions in Apple Store.
Google currently charges developers 15 per cent commission for the first £1 million in revenue in a year. If a developer surpasses the £1 million threshold, the standard 30 per cent commission rate applies to them for the remainder of the year. In a statement to The Verge, Google said that all developers using its Play Store platform are 'subject to the same policies,' 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,' the company stated. The Verge's report also quoted internal Google communications to claim that the company can break even on Play Store with a fee of 6 per cent, and that its decision to charge 30 per cent fee has 'no rationale, other than copying Apple'.
In recent years, Google's and Apple have been at the centre of several legal disputes over their app store policies. In August, Epic sued Google and Apple over antitrust claims, after the two firms removed the developer's popular Fortnite game from their app stores. The clash started after Epic Games announced a direct payment plan for Fortnite users, offering them a 20 per cent discount to the Apple price for in-app purchases.
Both Apple and Google criticised Epic for breaching their guidelines and dropped Fortnite from their app stores. In its lawsuit, Epic said that it was not seeking monetary compensation but wanted a ruling that would change the way tech giants run their app stores. In July, a bipartisan coalition of US state attorneys general filed an antitrust lawsuit against Google, accusing the company of abusing its control of the Android app store to thwart competition and force consumers into in-app payments.
The lawsuit alleged that Google was unlawfully forcing app developers to go through the Google Play Store to reach users and pay an 'extravagant' 30 per cent commission on app purchases. Last week, Apple agreed to change its App Store policy as part of a proposed settlement to a class action lawsuit. The iPhone maker said that it would allow developers to use messaging like email to share alternative methods of payments outside their iOS app, provided users consent to receive them and have the right to opt out.
Developers will no longer pay Apple a cut on purchases that take place outside their app or the App Store.
Apple has also agreed to publish a transparency report on the App Store, which will include statistics about the app review process, such as the number of apps removed or rejected from the store.