Epic alleges that Google paid $360 million to prevent Activision from launching its own app store

Activision Blizzard and Riot Games at one point told Google they could launch their own mobile app stores, according to new documents filed in Epic’s antitrust lawsuit against the search giant. The details came to light as part of the allegations about important agreements signed with the two companies. Google reportedly agreed to pay Activision around $360 million over three years and Riot around $30 million for a one-year deal.

In a documentGoogle executive Karen Aviram Beatty reports on a conversation with Activision Blizzard’s now CFO Armin Zerza a month before the two companies signed the big deal. “If this deal fails, [Zerza] claims that they will launch their own mobile distribution platform (partnering with another “major mobile company”, let’s say Epic)double down with Amazon/Twitch (or MSFT) for Cloud/eSports [sic]and stay away from Stadia ”, wrote Beatty (emphasis mine). While Zerza may have just been negotiating the hard way, Activision has yet to launch its own mobile app store, so it sounds like the company was happy with the end result of the deal.

Another document is a statement from an anonymous witness who appears to be someone who is or was involved in “Project Hug,” Google’s program designed to incentivize and support Play Store developers. In the deposition, the witness says that Riot Games told Google that it was considering launching a competing Android app store. The witness later says that “Riot and Activision Blizzard King were the ones who were the most direct with us” about considering opening their own app stores.

The Project Hug settlements first came to light in August 2021 as part of an unredacted Epic complaint. But Epic, in a newly amended complaint filed Thursdayalleges that Project Hug’s offerings are designed to “prevent the developer from opening a competing store or distributing their apps outside of the Google Play Store.”

Epic originally released Fortnite outside of Google Play in 2018, allowing it to bypass Google’s fees, and Epic has already argued that Project Hug was designed to entice developers to stick with Play rather than build their own stores. (Epic eventually brought Fortnite to the Play Store in 2020, but was removed a few months later). But based on the new documents, it appears that Activision and Riot were thinking of striking out on their own.

Speaking to the edge, Google and Activision denied Epic’s allegations. Google said programs like Project Hug don’t stop developers from creating their own app stores, and Activision said Google didn’t make them agree not to compete with Google Play.

“Epic is mischaracterizing business talks”

“Epic is mischaracterizing the business talks,” Google spokesman Michael Appel said. “Programs such as Project Hug provide incentives for developers to provide benefits and early access to Google Play users when they release new or updated content; it does not prevent developers from creating competing app stores, as Epic falsely claims. Indeed, the program is proof that Google Play competes fairly with numerous rival developers, who have various options for distributing their apps and digital content.”

“Activision testified in court that Google and Activision never reached an agreement that Activision would not open its own app store,” Activision spokesman Joe Christinat said. “Google has never asked us, pressured us, or made us agree to not compete with Google Play. We present documents and testimonials that prove this. Epic’s accusations are nonsense.”

Riot did not respond to a request for comment.

One of Epic’s exhibits also contains a list of more than 20 companies that Google has signed with Project Hug (now technically the “Game Speed ​​Program”) that it partners with as of July 2022. Activision and Riot are in the list, as did big game companies like EA, Niantic, Nintendo, Tencent, and Ubisoft.

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