In 2017, Google offered Netflix a special rate, with which the streaming platform would pay only 10% of its in-app purchase revenue on Android. The agreement, according to documents and testimonies presented in the Epic vs. Google trial, was contingent on Netflix committing to using the Google Play Billing service worldwide.
Yes, although it may seem strange, the all-powerful Google, known for its staunch defense of the 30% commission it charges app developers for transactions on the Google Play Store, was willing to make an exception for Netflix. Why?
The answer is simple: Google wanted to keep Netflix happy. The streaming platform is one of the most popular in the world, with over 222 million subscribers globally. If Netflix had decided to leave Google Play at that time, it would have been a tough blow for Google, losing a “piece of the pie.”
Ultimately, even anticipating potential financial losses by accepting the proposal, Netflix did not agree to the offer and removed the option to subscribe through the app, thus avoiding any in-app purchase commission.
But the agreement proposed by Google to Netflix also has implications for other app developers. If Google was willing to make an exception for a giant like Netflix, why not do it for other companies?
This question takes on particular relevance in the context of the Epic vs. Google trial, where Epic Games, the developer of Fortnite, sued Google for anticompetitive practices in its app store. After rejecting a similar offer to Netflix’s from Google, Epic accused the search giant of abusing its dominant position to force developers to pay a 30% commission on transactions made on the Play Store.
The Epic vs. Google trial is ongoing, but the offer Google made to Netflix could be a factor working against it. The fact that Google was willing to make exceptions to its commission policy could be interpreted by the judge as evidence that the company is indeed abusing its dominant position.
If the judge rules in favor of Epic, Google could be compelled to modify its commission policy, benefiting app developers who might then receive higher revenues for their products and services. However, it could also have negative consequences for consumers, as reduced (or eliminated) Google commissions might lead the company to increase prices for its services, such as Google Play Pass or Google One.
