More from Epic v. Google: everything we learned in Fortnite court
Pichai is being grilled about a September 16th, 2008, email from Bill Coughran where he announces the change:
To help avoid inadvertent retention of instant messages, we have decided to make “off the record” the Google corporate default setting for Google Talk.
However, Epic is not highlighting one very relevant passage further down the email:
If you’ve received notice that you’re subject to a litigation hold, and you must chat regarding matters covered by that hold, please make sure that those chats are “on the record”.
Pichai admits that Google kept this default setting ever since; he says he relies on the judgment of Google’s legal and compliance teams — especially Google chief legal officer Kent Walker.
“With respect to this case, you personally did not do anything to turn history on for your 1:1 and group chats, yes?”
He did not. Mark “CHATS” on your bingo card.
He says he marked documents attorney / client privilege even when he was not seeking legal advice — “just so the emails weren’t forwarded.” Has anyone told you that is wrong? “Not that I recall.”
Do you understand sitting here today that you should not be doing that? “Yes.”
You can mark “Fake Privilege” on your bingo card, folks.
He says that’s correct — and that he was head of Android and Google Play apps businesses before he became CEO, too.
“Is it fair that for the last 10 years you’ve been responsible for Android and Google Play?”
He says he had subordinates, but yes.
He’s here, and as in the US v. Google trial, he’s literally taking a stand — behind the podium that Google requested last week.
That’s Judge James Donato — he’ll be allowing Epic to say later today how much revenue Google shares with Apple for searches conducted in Safari.
He will be the first witness called today, says Epic attorney Lauren Moskowitz. Right now, Epic and Google are arguing over whether a public blog post written by Pichai should be entered into evidence. Google lead attorney Glenn Pomerantz argues that the blog post, which references the Microsoft antitrust trial of the ’90s, will be a distraction and is irrelevant to today’s case.
Moskowitz claims it’s crucial. I believe they’re referring to this Google blog post. The judge is allowing it for now.
I just saw Google’s CEO enter the Phillip Burton Federal Building and US Courthouse a few minutes ago. He’ll be testifying today.
I could not get a picture or ask a question; while he got waved through the security line, I was a little busy getting my bag and electronics scanned!
We’re not scheduled to start until 9:30AM PT / 12:30PM ET:
Today may be the single biggest day for big-name witnesses; not only is Google CEO Sundar Pichai dropping in on Jury Island but Epic plans to call Hiroshi Lockheimer, too. (Our Epic source didn’t want to be named because it’s not for sure.)
If there’s time, we may even see a prerecorded video from Andy Rubin, the original head of Android.
You’ll want to be here tomorrow: we should be hearing from Google CEO Sundar Pichai.
Epic attorney Yonatan Even asked Rosenberg this, and he said it sounded correct. Even also suggested that Epic and Samsung did not need to change the install flow in order to fix the “fake Fortnite” issue. (Presumably, that means it didn’t need to let Google add its Unknown Sources warnings, but I don’t know for certain.)
Even also pointed out Google didn’t implement its iOS-matching 15 percent subscription rev share till January 2018, and Rosenberg said he wasn’t aware of a single developer pulling out of Google Play and focusing efforts on iOS because of that delay.
Google Play boss Jamie Rosenberg, May 28th, 2016:
We’re starting to hear an escalation of the rumors that Apple will be changing its revshare on subscriptions to 85/15, potentially as early as WWDC (which is the week of 6/10).
Later in the email:
It’s a scramble but I think we need to assume the rumor is true and plan accordingly. If we can move quickly, we have a good opportunity to “lick the cookie” and preempt Apple’s announcement.
Apple did go ahead with the announcement, but Google did not lick the cookie.
(It shows the jury more of Google’s rev share changes predate the Epic lawsuit, though.)
While Netflix might have gotten a sweetheart deal on a better “LRAP++,” Google is positioning the original Living Room Accelerator Program as something fair it erected to compete with Apple.
It appears that Google Android boss Hiroshi Lockheimer may have proposed the idea in March 2015:
At our weekly TV meeting the topic of apps for TV came up and Serge pointed out he thinks Apple is offering a 15% revshare in this space and locking in content developers (a la HBO — he says Showtime have gone silent too and he thinks they’ve cut a deal with Apple as well.) I’m worried that we’re about to massively lose this developer base. Any ideas on what we could do to remain competitive? Can we also offer 15%? Or something even more interesting?
Sameer Samat sent his “something is wrong” message on August 8th, 2018. On August 13th, a different Googler had another reason to be concerned:
I took a deeper look on Friday and discovered a vulnerability in the Fortnite Installer (and Galaxy Apps private installer API) which allows a malicious app to install a fake version of Fortnite with arbitrary permissions granted.
That sounds concerning, but it also happened days later. Was Google’s kneejerk really about security or competition? I’m genuinely not sure. Could be both?
Google found another mention of Apple to ask the witness about: in a 2018 Google Business Council review of a proposed Epic Fortnite deal, the “Android Brand Impact” of not moving forward has two bullet points:
“inconsistent access to AA games”
and
“increases perception gap vs. iOS ecosystem”
Here’s part of February 2019 email from Rosenberg that suggests at least one Samsung dealmaker was interested in competing with Apple rather than just Google:
Here is what Jay said about Samsung’s goals:
*Primary motivation for investing in Games is to compete with Apple
*Secondary motivation to have some differentiation vs. the Chinese OEMs.
*Also, YJ Kim (head of services) has a revenue target in this area — though also gets credit somehow for how his activities help device sales.
I guess we now know who YJ is, too!
As usual, Google is working to normalize the business dealings that Epic is trying to demonize, and that begins with showing that Google Play boss Rosenberg had a relationship with Samsung for a reason: he was “working day to day with the partner management team at Samsung.”
Here’s Rosenberg, today:
We felt we were very vulnerable collectively on gaming [...] iPhones had been very strong on gaming, a number of top game titles launched first on iPhones and worked better on iPhones, and we were talking with Samsung about how we together did not have a strong experience on Android devices.
“YJ also said some cryptic thing that we would *not* do another deal like fortnite again. I asked why — he said it was not good for google/samsung.”
I spotted this intriguing passage in one of the Rosenberg emails earlier. Wonder why Epic didn’t highlight it?
Rosenberg didn’t do anything to preserve his Google chats, despite receiving a litigation hold in this case, he told Epic’s attorney.
It is now Google’s turn to question him.
Discussing the scrapped Project Banyan deal with Samsung, Rosenberg wrote on June 6th, 2019, that “it created an incentive dynamic where the store teams would be competing with each other.”
Asked Epic’s lawyer: “Your goals were not to compete?”
Rosenberg replied that the point was to join Samsung in competing against Apple. I suspect that Epic’s lawyers will gleefully point out that none of the documents mention Apple a little later today.
In the meanwhile, Epic is pointing out how uncompetitive this bit from Rosenberg’s email seems:
“If we couldn’t use rev share to secure confidence that they won’t drive down to 5%, then we wouldn’t do it.”
A Samsung exec told Google: “So you’re basically asking us to get out of the store business.” Google found nicer words: “We’re proposing that we focus together on helping you achieve your goals in a different way.”
We’re now seeing that one of Google’s goals for Project Banyan was effectively to puppet the Galaxy Store and provide a false choice for users. The agreement as proposed would see Google Play and the Galaxy Store side by side on the default homescreen, just like today, but Google would host the games, provide the billing, security, and updates in the Galaxy Store, too.
In exchange, Google would create a “financial agreement to help Samsung’s services revenue goal and justify deprioritizing the Galaxy Store,” the proposal suggested.
Again, Google and Samsung did not go through with Project Banyan.
Sameer Samat, VP of Android product management, and his colleagues, were very surprised to see that Samsung managed to get Fortnite on its phones via its Galaxy Store — without triggering the many-step Unknown Sources (US) prompt that, Epic argues and Google has internally conceded, creates so much friction that many users won’t bother.
Here is a message Google sent to Samsung afterwards:
Someone on our side was just able to fully download Fortnite on Note 8 with no unknown sources. We really need to understand what’s going on (and I think DJ should, too.) Very concerned. Also surprised that it’s on Note 8 given what you said about Note 9 and Tab S4 only.
Epic attorney Yonatan Even is accusing Google of having a handshake deal with Samsung not to compete too much. He points to how Google invokes the name of Samsung mobile president DJ Koh — and how Samsung quickly responds that “It was done by the Service team without my knowledge. I am looking into it now.”
“I wouldn’t characterize it as a handshake deal,” says Google former Play head Jamie Rosenberg.
I really, really thought Epic was building up to revealing that, having seen the Amazon threat, Google put up extra friction to keep people from installing the Amazon Appstore APK.
But no! Instead, Epic highlighted a 2017 passage that showed Google thought existing 14-step sideloading process already presented a “significant hurdle to switching to Amazon APK,” despite Amazon providing a 15 percent-plus discount to developers app store fees compared to Google Play.
I guess Epic’s trying to show the barriers to entry were already high due to Google’s work? “It did not become large,” says Rosenberg, of the Amazon Appstore.
In April 2017, an “Amazon Competitor Deep Dive” looked at what Amazon’s early results in Japan might mean for Play as a whole — pointing out that while Amazon’s Appstore had grown to 1 to 2 percent of Play users, it might account for as many as 20 percent of High Value Users (the “whales” who spend big money on in-app purchases in their favorite game titles).
Amazon didn’t want to lose paying users. A couple juicy passages (bolding Google’s):
Bad news: We face the risk of becoming a “showroom” for Amazon or other apps stores.
Good news: Amazon yet to establish critical mass. We have an opportunity to react before this happens.