Google’s million dollar deal with Activision was to prevent launching rival app store
In a bid to stop developers from competing with its Play Store, Alphabet Inc's Google has struck at least 24 deals with big app developers over three years. This includes an agreement to pay Activision Blizzard Inc about $360 million, according to a court filing on Thursday.
The filing stated that Google also agreed in 2020 to pay Tencent Holdings Ltd's Riot Games unit, which makes "League of Legends," about $30 million over one year. The financial details emerged in a newly unredacted copy of a lawsuit that "Fortnite" video game maker Epic Games first filed against Google in 2020. It alleged anticompetitive practices related to the search giant's Android and Play Store businesses.
Calling the lawsuit baseless and full of mischaracterization, Google said its deals to keep developers satisfied reflect healthy competition.
The Google agreements with developers are part of an internal effort known as "Project Hug" and were described in earlier versions of the lawsuit without the exact terms. The remuneration includes payments for posting to YouTube and credits toward Google ads and cloud services.
After the deal was announced in January 2020, Activision told Google that it was considering launching its own app store. Partnering with Riot also intended to "stop their in-house 'app store' efforts," court papers say. Google then forecasted billions of dollars in lost app store sales if developers fled to alternative systems.
Epic's lawsuit alleges that Google knew signing with Activision "effectively ensured that (Activision) would abandon its plans to launch a competing app store." The agreement increases prices and lowers quality of service, the lawsuit added.
Among others that signed with Google, as of July, were gamemakers Nintendo Co and Ubisoft Entertainment SA, meditation app Calm and education app company Age of Learning, according to the court papers.
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