Google extended a special offer to Netflix in 2017, proposing a discounted rate of just 10% for in-app payments on Play Store and effectively allowing Netflix to keep 90% of the revenue.
This information surfaced during the Epic v. Google trial documents, indicating that Netflix had previously paid Google a 15% fee for in-app subscriptions, as reported by The Verge.
However, before Google discontinued alternative payment methods, it attempted to persuade Netflix to voluntarily switch to Google Play Billing (GPB) by offering a 10% deal.
The proposed deal, part of Google's "LRAP++" program, was exclusively offered to Netflix under the condition of a global commitment to GPB.
Despite the offer, Netflix opted not to participate, and instead, it no longer pays Google anything for distribution via Google Play, guiding users to subscribe and pay through a mobile browser.
The decision stemmed from Netflix's anticipation of potential losses even at a 10% revenue share, estimated at around $250 million per year.
According to internal documents, Netflix compared sign-up methods, forecasting the financial impact over a 36-month subscriber period. Google didn't contest Netflix's assertions during the trial but emphasized Netflix's broad availability across various devices.
Google's attorney didn't challenge Netflix's claims, focusing instead on Netflix's widespread accessibility, implying that a platform like Netflix could afford to bypass the store and rely on browser sign-ups.
Google spokesperson Dan Jackson acknowledged that Google Play provides varying fee rates based on developers' needs or industry economics. He also mentioned the 2021 Play Media Experience Program, introduced after Epic's lawsuit, offering rates as low as 10% for apps in video, music, books and other verticals.
In contrast to rejecting Google's offer, Netflix had previously secured a unique arrangement with Apple, sharing only 15% of its revenue on iOS, half of Apple's standard rate. While the details of Spotify's deal with Google were not disclosed during the trial, the figures remained undisclosed to the public.
What Happened Between Epic Games and Google?
In 2020, Epic Games launched a high-profile lawsuit against Google, accusing the tech giant of antitrust violations and monopolistic practices within its Android app distribution ecosystem.
The legal dispute centered on Google's alleged imposition of exorbitant fees on in-app purchases made through the Google Play Store, creating what Epic Games deemed an anti-competitive environment.
The gaming giant contended that Google's tight control over the Android app market restricted healthy competition and innovation, adversely impacting both developers and users. The lawsuit echoed similar concerns raised by other companies challenging the dominance of major tech platforms.
The lawsuit highlighted the increased scrutiny on tech giants, sparking talks about the necessity for regulations to ensure fairness and promote competition in the digital marketplace.
Edited by Nikola Djuric