The last couple of years have brought increased scrutiny on Google Play's power over Android developers, especially in the wake of its lawsuit with Epic. The company followed Apple's lead back in March, lowering its fees to 15% for the first $1 million in revenue. A newly unsealed consumer lawsuit involving Google has revealed some new facts about how the Play Store is managed behind the scenes, including a secret deal made with Netflix.
As reported by The Verge, Google was so frustrated with Netflix publicly voicing its "displeasure" with the Play Store, it offered the streaming company an exclusive deal wherein Google would take a "significantly reduced revenue share." That effort was designed to keep Netflix actively using the Play Store's billing system rather than switching away from offering subscription sign-ups within the app. Even similarly-sized companies like Spotify and Tinder — both of which also looked for payment alternatives — weren't offered the sort of backdoor deal Netflix received.
It's not the only fact revealed in these unsealed documents. According to Google's own internal calculations, the company can break even on the Play Store with a 6% revenue cut — far lower than even the 15% it takes within the first $1 million. The 30% rate was seemingly chosen for no other reason than to match Apple's cut on the App Store.
3 - #Google calculated could break even with a 6 percent commission fee on Play Store - compared to 30 percent
— Michael Acton (@MActon93) August 27, 2021
In a statement delivered to The Verge, Google said the following:
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.
Despite Google's changes to its revenue cuts earlier this year, it still faces multiple antitrust lawsuits throughout the United States. As companies like Epic and Netflix continue to push for more options in third-party app stores and payment services, it'll be interesting to see what continues to change on the Play Store.