Epic Games has been trying to force Apple and Google into loosening their grips on their respective app stores. We’ve seen Epic Games join the Coalition for App Fairness non-profit, and we’ve seen them lobby for a North Dakotan bill that tried to dismantle Apple and Google’s app store and payment monopolies. That bill failed, but the battle between Epic Games and Google has been ongoing. This all started when Fortnite bypassed the Google Play and the Apple App Store’s fees by allowing direct payments for in-game purchases.
Throughout the course of the legal battle, court documents have been released revealing some pretty interesting secrets from both Google and Apple, even things that might have seemed irrelevant like the planned release of an iPhone nano in 2010. The most recent set of unredacted court documents released have revealed just how far Google was willing to go to maintain its dominance over the Play Store. Google allegedly undertook a number of actions, including spending millions of dollars to keep game developers on the Play Store, talked about teaming up with Tencent to take over Epic, and even floated the idea of disabling sideloading on Android entirely.
These court documents were available as part of the initial filing but were partially redacted by Google. The company’s lawyer said to Reuters that Epic’s attempt to remove the redactions on the documents was “improper,” adding that “Google objects to Epic’s disregard for the court’s protective order and the improper disclosure of its confidential information.” However, the redactions were removed by Judge James Donato who is presiding over the case.
Project Hug — Paying top developers to stay on Google Play
Project Hug (via The Verge) is alleged to be a program Google founded to quietly pay off game developers in the tune of hundreds of millions of dollars in incentives to keep their games on the Play Store, according to the unredacted documents. The program was later renamed to the “Apps and Games Velocity Program.” According to Epic Games, a 2019 report compiled by the Google Play finance team raised concerns that Epic may attempt to arrange deals with OEMs like Samsung to pre-install its competing games store. Epic Games takes a lower revenue sharing fee than Google, and Google worried that this may be enough to win over developers.
The Google Play finance team estimated that the Epic Games Store on Android could have resulted in a loss of at least $350 million for Google, potentially topping out at $1.4 billion lost revenue by 2022. Worse still for Google, this could have grown to losses starting at $1.1 billion and potentially reaching as high as $6 billion should other stores distributed from Samsung and Amazon “gain full traction.” Epic Games says that Project Hug was developed alongside Project Banyan, Google’s first attempt to buy out Samsung’s app store. Google’s emails show that going as far back as 2011, senior Android executives were “having discussions with Samsung to get them to stop distributing apps through Samsung App store.”
Project Hug was created and developed alongside Project Banyan, and is described in internal documents from Android executives as “a hug developers close and show love plan”, or “a surge plan to throw extra love/promotion to top developers and games (including Tencent portfolio companies).” Google’s plan, the company alleges, was to spend “hundreds of millions of dollars on secret deals” with over 20 of the top developers that were “most at risk […] of attrition from Play.” Google’s documents note that Project Hug was largely a success, and by the end of 2020, Google had signed deals with most of its targets. The most notable deal was with Activision Blizzard, which kept them on the Google Play Store.
In a statement given to The Verge, Google spokesperson Peter Schottenfels commented that “Google Play competes with other app stores on Android devices and on rival operating systems for developer attention and business. We’ve long had programs in place that support best-in-class developers with enhanced resources and investments to help them reach more customers across Google Play. These programs are a sign of healthy competition between operating systems and app stores and benefit developers tremendously.”
The introduction of the Premier Device Program
More newly released information (via The Verge) shows that Google ran a “Premier Device Program” that started in 2019. It gave Android phone makers a greater share of search revenue than would normally be received, and in exchange, OEMs agreed not to ship devices with third-party app stores preinstalled. The rule specifically prohibited “apps with APK install privileges” without Google’s approval, meaning that the only place a user could install apps from without sideloading was the Google Play Store.
Products that qualified as “premier devices” yielded a 12-percent share of Google’s search revenue for the OEM, compared to the standard 8-percent that they would normally earn. LG and Motorola got an even better deal; each company was offered a share of between 3 and 6 percent of what customers spent in the Google Play Store.
“Google’s Premier Device Program was not publicly known, and was not known to Epic, before Google recently began producing relevant documents in this litigation,” Epic’s lawyers wrote in the complaint. “Google has sought to conceal its most restrictive anticompetitive conduct by, among other things, including in the agreements themselves a provision restricting signatories from making ‘any public statement regarding [the] Agreement without the other party’s prior written approval.’”
The complaint also mentions that by May of 2020, many of the world’s largest and most popular Android OEMs agreed to exclusivity for most new Android devices. Motorola and LG committed nearly all of their devices to the Premier program, while the companies that are part of the BBK conglomerate (OPPO, Vivo, and OnePlus, among others) committed around 70-percent of their devices to the Premier program. Epic Games also stated that they had struck a deal with OnePlus to distribute games through the Epic Games app for a seamless installation of games like Fortnite. However, Google allegedly forced OnePlus to cancel the deal, citing Google’s “particular concern” about Epic having the ability to install and update mobile games while “bypassing the Google Play Store.” LG was also prevented from preinstalling the Epic Games app on LG smartphones.
Google considered teaming up with Tencent to purchase Epic Games
Google’s executives apparently considered approaching Tencent about purchasing shares in Epic Games, rather than approaching Epic directly (via Protocol). According to the court documents, “Google recognized that Epic might not accept its offer. ‘As a potential alternative’, a senior Google executive proposed that Google ‘consider approaching Tencent,’ a company that owns a minority stake in Epic, ‘to either (a) buy Epic shares from Tencent to get more control over Epic’, or ‘(b) join up with Tencent to buy 100% of Epic.” Tencent has owned a 40-percent stake in Epic since 2012, but Epic CEO Tim Sweeney maintains control of the company with over 50-percent of shares being in his name.
In a statement, a Google spokesperson said, “As we have stated previously, Epic’s lawsuit is baseless and mischaracterizes our business conversations. Android provides more choices in mobile devices for developers and consumers.”
Google even considered preventing sideloading
Perhaps one of the most shocking considerations by Google for the end-user, the company considered preventing sideloading on Android smartphones in general (via 9to5Google). A senior executive suggested that Google could “lock down Play/Android and not allow sideloading,” though it appears that this idea was not pursued. It was noted by Epic Games that Google believed it had “good privacy/security arguments” as to why sideloading may have been “dangerous” to Android users, even despite the European Commission’s investigations into Google at the time.
In fact, it seems that Google may have gone the other way on this consideration. Android 12 will finally let alternative app stores update apps without bothering the user, meaning that it will be easier than ever to install and use third-party application stores. Still, locking down the ability to sideload was in consideration by some at Google, and the very thought goes against one of the core values of Android — that being openness.