Epic v. Google: everything we learned in Fortnite court
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“These [Android] costs are not allocated to any other products, including Play.”
That’s the expert opinion of Google’s accounting professor, who says it “just makes sense if you want to track the costs of a particular activity, like R&D” in a separate profit and loss statement (P&L).
“The other reason is these costs benefit the whole ecosystem... we call this a joint cost instead of a shared cost because it benefits all the different products simultaneously,” says Skinner.
He says it’s not unusual for companies to allocate their costs this way. He believes the operating margin of Google’s platforms and ecosystems group in 2020 would be 19 percent if you account for this — not the 66 percent that Epic’s expert calculated for Google Play specifically.
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