Google,
concerned that the large U.S. carriers like Verizon, T-Mobile, and
AT&T were planning to launch their own Android app storefronts to
compete with the Play Store, agreed to pay off companies that have the
capability to develop alternative app stores. Besides sharing revenue
with some wireless providers, Google included several app developers and
device makers in the scheme.
So why would
Google feel threatened by these third parties? The firm was concerned
that device manufacturers and carriers could pre-install a third-party
Android app storefront on new devices. Unlike iOS, which is a walled
garden inside a walled garden surrounded by a walled garden, Google
allows Android users to sideload apps from third-party app stores. And
should Google even hint at a change to this, in the current state of
lawmakers' relationships with big tech, the Alphabet unit is likely to
be branded anti-competitive.
Google ferociously guards its 30% cut of Play Store revenue
To
prevent alternative app stores from appearing on Android phones, Google
signed deals with companies such as LG and Motorola; in exchange for a
cut of Play Store revenue generated by users of these companies' phones,
the manufacturers promised not to preload alternative Android app
stores on their devices. Of the 30% cut of in-app revenue collected by
Google, 20% to 25% would be given to Mobile Network Operators (MNOs) to
pay them off from competing with the Google Play Store.
Now unredacted, court documents reveled Google's plan to protect the Google Play Store
The information about these deals was discovered by Mashable
after unredacted portions of court documents were released. One part of
the document filed by Epic Games states that since 2019, Google has
entered into agreements with OEMs restricting them from including
third-party Android app stores with their devices. In exchange, "Google
agrees to share with OEMs 'monopoly profits Google earns from its Search
business (and in some cases profits from the Play Store itself)."
Epic
states that Google entered into these deals once it realized that the
carriers and the phone manufacturers constituted a threat to what the
lawsuit calls Google's monopoly. Earlier this month, court documents
revealed that Google was considering the purchase of Fortnite developer
Epic Games. Google reportedly considered Epic and other Android app
developers to be threats to the Google Play Store.
Google considered buying Epic Games, but never approached it with an offer
As
for the popular Fortnite game, Google feared that it would lose its 30%
slice of the pie once Epic offered the game from its own website. As a
result, the Search Giant supposedly discussed internally a plan to buy
Epic. While Google did discuss a possible transaction internally,
it never approached the game maker with any proposal or offer. It did
hope to give Epic a special deal in return for an exclusive launch in
the Play Store, a plan that did not reach fruition.
Like
Apple's App Store, the Google Play Store has been under attack by
lawmakers who have called out both app storefronts for anticompetitive
behavior. Last month, 36 state attorneys general filed a lawsuit against the Play Store.
The suit accused Google of paying off Samsung so that the latter would
not compete with Google's Android app storefront. And yes, these suits
are more than just a pesky pain in the butt for Google. Consider that
Utah Attorney General Sean Reyes called Google's monopoly is a menace to
the marketplace.
In addition, in both the
House and Senate, a bill has been proposed called "The Open App Markets
Act" that would allow app developers to inform consumers of cheaper
in-app purchasing options, and protect the sideloading of apps (which as
we've noted, Google allows and Apple doesn't). If turned into
legislation, the Act would give consumers more control over their own
devices, protect the privacy, security, and safety of consumers, amd
prevent app stores from taking advantage of app developers.
Source: phonearena.com
