More from Epic v. Google: everything we learned in Fortnite court
Judge James Donato is telling the jury that they will see more details about Spotify that won’t be revealed in public court. It’s the second time we’ve done that in this case — but the previous secret numbers eventually did get unsealed, revealing that Spotify had a secret deal to pay effectively nothing to Google for the Play Store.
Sandra Alzetta is Spotify’s head of commerce. We’re watching a video deposition from September 2022.
A secret Google deal let Spotify completely bypass Android’s app store fees
Amazon’s top recommendation to improve the Amazon Appstore in 2021 was to fix its installation instructions — because they were at least slightly wrong for phones as popular as the Samsung Galaxy S20.
However, the picture under “Turn on Unknown Sources” did not match the settings for numerous Android phones we tested (LG K30, Galaxy S9, Samsung Galaxy S20, Pixel 3, ASUS Zenfone Max [...])
Also, Google is pointing out that Amazon Fire tablets included sideloading scare screens as well:
Your tablet and personal data are more vulnerable to attack by unknown apps. By installing apps from this source, you agree that you are responsible for any damage to your tablet or loss of data that may result from their use.
Guess sideloading friction wasn’t just Google’s fault?
As of 2021, “Amazon had significantly fewer apps (456k) than Apple (1.85m) or Google (2.65m)” according to an Amazon doc.
I’m beginning to wonder, as we zip through an internal Amazon document from April 23rd, 2013 that identifies early strengths and weaknesses across various app stores. Are these things really Google’s fault?
Amazon received app updates later than Google
Amazon had outdated versions of some Amazon subsidiary apps compared to Google
Amazon was missing many key apps for non-Kindle [...]
Apple and Google’s merchandised content had a more curated and editorial feel
Kindle versions of some racing games appeared to have lower-quality graphics than Google or Apple versions.
Amazon provided limited personalized recommendations
Google and Apple provided more full and consistent app data
I’m very curious if there’ll be any documents to back up Morrill’s suggestion there.
Here are a couple of compelling things he said: the Amazon Appstore cannot be easily and automatically updated if it’s sideloaded — and so wouldn’t automatically receive security fixes from Amazon, either. That could cut against Google’s argument that its way is more secure.
We’re looking at the old “Hollywood” process to install the Amazon Appstore, one step at a time. Some of the steps are Amazon sign-in and download steps. Many of them are Google’s Android operating system steps. Added up, it looks like a LOT of friction.
But again, Google showed in court, in a video, that sideloading the Epic Games Store can take just 25 seconds now.
Amazon’s Donn Morrill says Google’s decision not to allow alternative app stores in Google Play “strongly discouraged users from discovering” and installing the Amazon Appstore on Android.
It was “materially part of the reason for the limitations of the Amazon Appstore on Android,” he says.
At one point, Amazon saw in testing, only 11 percent of users who visited the Amazon Appstore’s mobile install page wound up successfully installing it.
(That number appears to be for a proposal to replace Amazon’s “Hollywood” install flow with a newer “Spelljammer” install flow, though we clicked away before I could read more. I wonder if Spelljammer had better results.)
I’m not sure we’ve heard that number before — Amazon exec Donn Morrill just read it off a spreadsheet prepped by lawyers without questioning it. He says Amazon incurred roughly $1.4 billion in expenses on the Appstore from 2015 through 2021.
In 2018, roughly a third of the Appstore’s sales came from Android. By the end of 2021, it was less than 10 percent, he testified — with third-party Android devices (read: not Kindle Fire tablets) contributing “just north of $15 million.” That’s tiny. It helps make Epic’s point that a sideloaded app store isn’t really a viable competitor to Google Play on Android.
We’re done with Epic’s big-name witnesses like Google CEO Sundar Pichai and Epic CEO Tim Sweeney — who will come next? (We never did hear another peep about “father of Android” Andy Rubin’s video deposition, for that matter...)
We’ll probably begin with Amazon exec Donn Morrill, though, whose testimony barely began before the judge told us all to go home yesterday.
Last tidbit of the day: Amazon’s Donn Morrill says the Amazon Appstore’s actual commission rate was calculated at roughly 10 percent.
We also saw Amazon paid some developers one-time fees of up to $100,000 to develop apps and would sometimes offer other deals.
See you tomorrow! We’re off starting Wednesday, though, and will stay off through Thanksgiving and Black Friday.
We’re listening to video deposition from August 11, 2022, with Donn Morrill, a director of apps at Amazon who’s also worked with teams on the company’s Alexa voice assistant.
Google was once worried about Amazon stealing its whales, but that threat didn’t materialize, and it’s still not clear whether Google needed to change a thing to keep it from happening. Do we get that now, or will his deposition touch on a different facet of Android friction?
“We cannot sell out of PlayStation at a lower price than we sell on PlayStation,” says Epic CEO Tim Sweeney, referring to a most favored nations (MFN) clause in the contract with Sony.
That sounds familiar — I think we spotted something like that in a Sony contract during the Epic v. Apple trial, but I can’t find it at this moment.
Google tried to suggest this was shady since Sony is now an Epic Games shareholder, but Sweeney says it’s a standard part of PlayStation contracts.
And (minus a couple bits I didn’t quite catch) we’re done with Tim Sweeney. On to a taped deposition from an Amazon executive: Donn Morrill.
Epic: “Does Tencent control Epic?”
Sweeney: “No.”
“Who does?”
“I do. I’m the controlling shareholder of Epic.”
What about Tencent?
“I came up with the idea of Project Liberty, and when we disclosed to them, they were rather surprised.”
He says it’s converting at a “much lower rate than we’d estimate if we were on Google Play.”
Sweeney was absolutely brazen on the stand just minutes ago, looking a tad like a greedy exec, but he’s now Epic’s witness again.
Epic points out that Google never asked him how much Epic pays to put Fortnite on Windows or Apple computers.
“Microsoft gets nothing when we distribute Fortnite directly,” says Sweeney. How about Apple?
“Zero.”
“Mr. Sweeney, you testified that you’re not seeking damages, but your company would make hundreds of millions of dollars from the arrangement you see on this screen, right?” asked Google’s lawyer, pointing to a V-Bucks purchase screen where users see a higher price to use Google Play Billing.
“I think it would be billions of dollars!” Sweeney said.
Earlier:
The reason you would love that is because you can set both of these prices, and as long as you set the Google Play price even a little bit higher, more people will choose Epic direct payment, right? And when that happens, Google gets nothing, right?
“That’s right,” said Sweeney.
He said it would be “awesome!” if he could avoid paying Google anything.
Epic CEO Tim Sweeney admits that V-Bucks in the Epic Games Store are more profitable than V-Bucks purchased on game consoles, since it charges the same $8.99 for 1,000 V-Bucks on each platform yet pays fewer fees on its own website.
Google tries to suggest that Sweeney’s just putting that money in his pocket, but he won’t go that far.
“We’re saving the part which is not paid to the payment processor, so 3 percent.”
You can read the conversation at #41 here in my cache of the best Epic v. Apple emails, but Google sees the tip-off as more than a curiosity — it’s asking if Epic briefed other console makers, too.
But while an Epic Project Liberty presentation slide does suggest that Epic would “pre-brief appropriate partners” two weeks before it sprung its trap, Sweeney says Epic simply prebriefed all the console partners on a reduced price for V-Bucks, not the whole #FreeFortnite campaign.
Google’s lawyer keeps saying “you KNEW” at the beginning of each question, as if Epic CEO Tim Sweeney hadn’t already admitted to premeditating the entire legal fight.
But just in case you’re nodding off in the jury box, like one juror I’m looking at right now who’s wearing a puffy black vest, perhaps his forceful tone will get your attention.
(Google may need to show these things in order to win its countersuit.)
Google is repeatedly asking Tim Sweeney if he understood the notice he got when Fortnite got rejected from the Play Store for the second time. We’re looking at it now:
your app continues to violate Payments policy, which generally prohibits games published on Google Play from providing a payment method other than Google Play Billing to purchase in-app virtual currency or in-app digital downloads.
“You understood from this email that Google’s payments policy prohibited you from using Epic Pay for purchases of V-Bucks, right?”
Sweeney says yes.
“You decided to sneak that version in, right?” Google’s lawyer Jonathan Kravis asks, referring to the hotfix.
“Yes that’s what we decided to do with Project Liberty,” Sweeney freely admits.
I got a laugh out of this whole conversation a couple years ago, and Google’s bringing it up again: you can read the original documents at #32 in my cache of the best emails from the Epic v. Apple trial.
The TL;DR: Tim Sweeney promised he wouldn’t give into pressure to put Fortnite on the Play Store, negotiated a special deal with Samsung for 12 percent, then went back on his word — and Samsung wasn’t happy.
Sweeney says Epic still does have a special deal with Samsung, though, to this very day.
Judge James Donato ordered that Google could bring up once and only once during the trial that Epic Games is partially owned by Tencent, a Chinese company, and not dwell on it. That just happened.
Kravis didn’t do much with it, simply adding it to a machine-gun list of yes/no questions including “Tencent is a Chinese company, right?” and “Tencent is a significant investor in Epic Games?” later suggesting out that Tencent signed a Project Hug deal as well.
I’m afraid I didn’t glance up at the jury in time to see if there was any reaction. They seem fairly comfortable and completely unreadable right now.
Sweeney agrees.
More questions from Google’s Kravis designed to point out hypocrisy:
“The 12 percent fee isn’t just for payment processing, is it, Mr. Sweeney?”
Sweeney admits his Epic Games Store’s 12 percent is for more than just payment processing.
“What’s true for the service fee in your store is also true for the service fee in our store, right?”
Sweeney waffles.
We’re looking at a slide showing all the places you can buy V-Bucks: Epic’s website, consoles, PCs, physical retail, the sideloaded app, and the Samsung Galaxy Store.
Sweeney admits that if you buy your V-Bucks anywhere else, then use them in Fortnite on Android, Google doesn’t make money.
Sweeney agrees.
Google’s Kravis particularly incisive question might make Sweeney look like he’s trying to have it both ways. Fortnite is a freemium game, Google is pointing out — meaning most of its players are subsidized by a smaller number of paying customers.
But that’s also how Google Play works as an app store, and how Google has been justifying its 30 percent fee (and, if we go meta, how Epic is likely funding this whole legal battle, since its PlayStation riches probably subsidize its Android and Apple legal fees.)
Kravis is taking a while to get around to this point, but we’re moving down that road — he just asked Sweeney how much it costs Epic to create the “V-Bucks” it sells players.
Google lawyer Jonathan Kravis has a slideshow ready and waiting and is asking Epic CEO Tim Sweeney the same basic question four ways: does Sony charge 30 percent? Does Microsoft charge 30 percent? Does Nintendo charge 30 percent? Does Apple? Do any of them allow sideloading or app stores?
Sweeney agrees, all of them charge 30 percent. None of them allow sideloading or app stores — save Android.
“Epic still makes plenty of money on consoles, right?” asks Kravis.
Epic is currently losing money, Sweeney claims — but Kravis says Epic earned $12 billion across Sony, Microsoft and Nintendo platforms.