Sean Hollister

“Zero percent if they process their transaction and 4 percent if Google processes their transaction,” we just heard in court.

There’s no other new fee. Both Google and Spotify agreed to each commit $50 million to a “success fund” as part of the sweetheart deal, though.

The story was this one, and I’ve long been curious if it was the seed that grew into this entire Google lawsuit.

Here’s the other story Epic accused Google of planting.

Sweeney was also “critical of Play’s business model” on the call, though. “He didn’t agree with it,” says Harrison.

“He felt we’d drawn the line in the wrong place, that we had large companies subsidizing small companies, and that wasn’t the right way to have developed the model.” That definitely cuts at Epic’s David v. Goliath narrative if true.

Note: Google’s Project Elektra idea of buying a controlling stake in Epic was from 2018. it’s not clear if Elektra was still in play in 2020.

Then, Google’s lawyer pointed out one phrase that doesn’t appear anywhere in the notes of that meeting: Google Play.

Google’s suggestion is that despite the controversial notion that Google and Apple might “work as if we are one company,” and their codependency on search revenue, all of that shouldn’t be relevant to today’s Google Play antitrust case.

Google also went through some internal documents about “Apple Partnership Strategy” that apparently don’t suggest any partnerships between the companies around Google Play. I wonder if Epic’s lawyers will find one that Google omitted, though.

“The reason we are proposing this bespoke deal with Spotify is because of its unprecedented position and bargaining power in the market and we had to offer a creative solution to bring their full value to the Play ecosystem.”

“Listening to music is one of [the phone’s] core purposes... if we don’t have Spotify working properly across play services and core services, people will not buy Android phones,” Harrison said in court.

We also got more insight into what the 6 percent and 10 percent numbers meant in that deal:

If I’m reading this right, Google would collect 0 percent when users chose Spotify payments alongside Google payments and 10 percent when the users chose Google. In situations where users didn’t get a choice, Google would collect 6 percent, regardless of who processes the transaction. I’m genuinely not sure, though.

Here’s “What Google gets” from the deal, according to an internal Google doc:

Here’s what Activision got:

Correction: I missed copying over a line about GCP credits. It’s in there now.

Another:

Another:

We saw a 2x2 matrix where Spotify had a 0 percent processing fee and 6 percent service fee and Google had a 10 percent processing fee and 6 percent service fee.

He took a stab at estimating how much money Apple gets from Google in the gigantic Google default search deal, too: greater than $15 billion, less than $20 billion per year.

Harrison says he did indeed believe it was a risk that ABK would launch its own mobile distribution platform. “I identified that risk and it did not happen.”

July 16th, 2018, in a reply from Dave Sobota:

The direct investment route had Google internally proposing to invest ~$2B in exchange for a ~20 percent stake of Epic. Google wrote: “Will require a substantial investment to gain influence.”

The Tencent / controlling interest route sounded very tentative:

Update: Fixed typo and added a line about “Yeti” that I missed copying over.