Google pays its competitors not to create an alternative to the Play Store, it’s illegal
According to Reuters, Google paid huge sums of money to 24 app developers not to compete with the Play Store by opening their own app stores.
Google would have paid an amount of $360 million to Activision Blizzard so that the latter does not create its own application store. Under the terms of this agreement, the video game giant agrees not to compete with Google’s Play Store for a period of three years. The Mountain View firm would have concluded no less than 24 contracts of this type with various development studios, including Activision, but also TenCent, Nintendo and Ubisoft.
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Having heard of these transactions as early as 2020, Epic Games had decided to sue Google in court for anti-competitive practices aimed at ensuring Play Store’s monopoly on the marketing of applications for Android. This procedure is also reminiscent of the lawsuit between Epic Games and Apple. The publisher of Fortnite accuses the Cupertino company of claiming an undue share of in-app payments in video games.
Among other huge contracts, Google would have paid $ 360 million to Activision Blizzard
Google admits that the Play Store generates billions of dollars in profit. The proliferation of competing app stores would be a disaster for the company. Epic Games specifically blames Google for putting all of its financial might and infrastructure behind the consolidation of the Google Play Store monopoly. This secret initiative even has a name, “Project Hug”. In addition to being paid in credits to spend on the company’s cloud services and credits to use in Google Ads, developers are also paid for posting videos to YouTube.
Once again, Google finds itself in the hot seat for an anti-competitive practice. According to Epic Games, “such an agreement increases prices and lowers the quality of service”. Arguments to which the American authorities will probably be sensitive. The Mountain View giant is not the only one to be scrutinized by the American FTC. The latter as well as the European Union are currently examining the validity of the takeover of Activision Blizzard by Microsoft. The merger of these two video game behemoths would create a dangerous monopoly for competition.