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For Netflix, Google was willing to lower Play Store commission

New unsealed documents from a lawsuit reveal Google was prepared to give Netflix a discount on Play Store fees

August 29, 2021 / 11:46 AM IST
Netflix was given special treatment on the Play Store

Netflix was given special treatment on the Play Store

New unsealed legal documents seen by The Verge reveal that Google was willing to lower the commission it charges services on its Play Store to keep Netflix happy.

Google did this after services like Spotify, Tinder and Netflix expressed their frustrations on the 30% revenue cut that Google imposes for all the apps on the Play store. The search giant then offered Netflix a revised, lower percentage of revenue commission to keep them from switching to alternate modes of payment.

In a statement shared with The Verge, Google says, "All developers are subject to the same policies as all other developers, including the payments policy. We’ve long had programs in place that support developers with enhanced resources and investments. These programs are a sign of healthy competition between operating systems and app stores and benefit developers.”

The suit also shed light on the 30% revenue share model Google has for the Play Store. The lawsuit cites Google's own internal documents that suggest that the company can break even by going as low as 6%. It also quotes an internal communication within Google stating that the 30% fee has, "[n]o rationale, other than copying Apple.”

Also within the filed documents were Google's estimates of competing stores from major manufacturers like Samsung, who only managed $100 million in revenue for 2019. Google's Play Store earned $4 billion in the same period and just on Samsung devices.

Overall, the suit claims that Google's Play Store earnings for 2019 totalled $11.2 billion, with $8.5 billion of gross profit and $7 billion written off as operating income.
Moneycontrol News
first published: Aug 29, 2021 11:46 am
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