CARY – In a new court filing this week, Epic Games alleges Google paid video game companies such as Activision hundreds of millions of dollars to not develop app stores that would mean competition for Google’s own app store.
The recently unredacted information is part of Epic’s antitrust lawsuit against Google about limits and fees (up to 30%) Google imposes on developers selling through the Google Play Store.
Epic, which launched its own app store in 2018, also this week renewed a similar antitrust suit against Apple in an appeal in a California federal court.
The moves by Google were part of something called “Project Hug,” Epic says. Epic stepped up its legal fight with Google in October and disclosed the unredacted information Thursday. Epic and its globally popular Fortnite game were banned from both Apple and Google app stores, triggering the initial suits.
Copies of the unredacted information was provided to WRAL TechWire. Google previously has denied Epic’s claims.
Epic describes Google’s moves as “unreasonable restraints of trade.”
“Google has entered into anti-competitive agreements, including but not limited to Project Hug agreements, to choke off competitors’ access to differentiating content critical for app stores’ success. As of July 2022, Google has entered into Project Hug agreements, under the Games Velocity Program and Apps Velocity Program, with at least 24 top developers, many or all of whom has been a vocal agitator about Google’s business model or had asked for ways to explore potential opportunities for change to business model,” Epic said
A look at the agreements
“Through agreements and understandings (together “agreements”), including but not limited to Google’s “Project Hug” initiative, inclusive of the Games Velocity Program in its different iterations, Google paid or otherwise induced its potential competitors to agree not to distribute apps on Android in competition with the Google Play Store, either through their own competing app store, or through direct distribution,” the filing says.
“Specifically, Google identified developers who were ‘most at risk . . . of attrition from Play’ and systematically approached each of them with an offer of an agreement designed to prevent the developer from opening a competing store or otherwise distributing its apps outside of the Google Play Store.”
Google points out that Activision Blizzard was paid $360 million over three years beginning in January 2020.
Riot Games was paid “approximately $30 million in March 2020.
Other game developers were also paid, Epic says.
“For example, according to a Google internal email sent from Google’s Managing Director of Global Partnerships to other executives at Google, in October 2019 Activision Blizzard, Inc. [ABK}one of the largest game developers in the world and the creator of worldwide popular titles such as Candy Crush and Call of Duty, told Google that it was considering starting its own competing Android app store, but that the decision depended on whether it ‘can find the right deal/solution with Google’”. Google subsequently entered into a three-year agreement with ABK, which was signed on January 24, 2020, pursuant to which Google agreed to pay ABK approximately $360 million,” Epic says.
“As another example, Riot Games, Inc. (“Riot”), another top game developer that was contemplating launching a competing app store, entered into a one-year Project Hug agreement with Google on March 9, 2020, under which Google paid Riot approximately $30 million and Riot agreed not to launch early or exclusive titles on other app stores and to maintain content, feature, functionality, and promotion parity between its titles on the Google Play Store and on other app stores. Google understood and intended that Riot, like ABK, would not launch a competing Android app store absent the ability to offer exclusive Riot apps in that store—an ability Riot gave up in exchange for millions of dollars. (See supra ¶ 200.) Riot has not entered the Android App Distribution Market to date.”