Google offered Netflix a cut on its Play Store commissions, according to reports

A lawsuit was filed by several state attorneys general against Google and its Play Store. It echoes the Epic vs. Apple fight. A new document explains how and why Google’s app store is so similar. MLex senior correspondent Michael Acton points out the new complaint, which arrived Friday night from lawyers appointed to represent consumers (that's us) in a potential class-action lawsuit that joins the states and Epic Games in accusing Google of abusing its monopoly power and of anti-competitive behavior.

Image: MLex. CONSOLIDATED FIRST MODIFIED CLASS ACTION COMPLAINT CASE NO. 3:20-CV-04761-JD 42

Most telling of all is the mention that popular subscription services such as Tinder, Spotify, and Netflix have attempted to get around Google Play Billing's 30% cut. This is not surprising, since Netflix and Spotify collected credit card information directly. Google posted a "clarification" explaining to Play Store apps that they must use Google's billing system. They also gave them a year for changes. The lawyers claim that Google offered Netflix a "significantly decreased revenue share" in an apparent attempt to squash its desire for a different payment system.

Although we don't know the timing or details of the pitch, it is a reflection of what we learned during the Epic vs. Apple trial. Apple emails showed that it offered sweeteners to keep Netflix using its in-app purchases system.

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A Google spokesperson stated that all developers are subject to the same policies and guidelines as other developers. This includes the payment policy. Since long, we have programs that provide support for developers by providing them with increased resources and investments. These programs are a sign that there is healthy competition between app stores and operating systems. They also benefit developers." It's hard to say if this is a sign Google's efforts match Apple's, with Google cutting the commission for subscriptions by half after one year. It does offer a 15% cut to developers for their first $1,000,000 in revenue.

Google's 30 percent standard commission is still a target. The suit cites internal Google figures that suggest the break-even point for revenue sharing is about six percent. According to the complaint, internal communications from Google state that setting the "arbitrary" fee at 30% has "no reason other than copying Apple."

The lawyers also cite Google estimates as indicating that even a big player like Samsung can only generate $100 million in revenue in 2019, while the Play Store generated around $4 billion from Samsung phones. Reuters also reports that a filing in the antitrust state AGs case against Google shows that the Play Store made $11.2 billion total in 2019, with $8.5 Billion in gross profit, and $7 Billion in operating income.