Sean Hollister

One internal Google slide titled “Google-wide ROI shows positive contribution of $1.2B” suggested that Google would spend $1.78 billion from 2019–2022 on “Play Risk Mitigation.”

It showed Google spending a projected $95M in 2019, $294M in 2020, $588M in 2021, and $803M in 2022.

There was also a field called “total cost to serve,” where Google would spend a projected $994M over that same period: $50M in 2019; $340M in 2020; $316M in 2021; and $288M in 2022.

I can see some of the exhibits in the courtroom as they’re entered into evidence, though, and I’ll do my best to highlight any particularly interesting bits for now.

Epic will likely try to use Owens to show how easy it is to stand up such a system and, thus, that Google doesn’t deserve so much money for Google Play. But we haven’t gotten that far yet.

Google took $83M in revenue share from Tinder that year, while providing $98M in value under one estimate and $54M in value in the other.

Marchak also says the model has had “numerous evolutions” since 2019 and that while Tinder was likely paying 28 or 29 percent in 2019, it would be paying 15 percent today due to Google’s reduced fee for subscription services.

“Tinder is now deriving only 10% of the revenue share value versus the 30% they pay.”

We’re now looking at emails where Marchak tells his bosses at Google that “this seems to justify Tinder’s decision” and where he suggests they use his model of negative value to justify giving Tinder a better deal.

“This is so negative we think we need to use this internally to justify giving Tinder a 15 percent deal or better?” Google’s lawyer asks.

“Yes, we think about the value we’re creating for developers all the time,” answers Marchak.

Google estimated the average value the “top 100 most negative” devs were getting was just 19 percent. Simple math based on other slide deck numbers suggests the 100 devs overpaid $1.43 billion per year — Epic’s attorney had Marchak try it out on his own calculator in the courtroom.

Google will try to argue these calculations later turned out to be wrong.

This surprised Judge Donato: “Right now, Google is allowing users to post its own billing system?”

It also surprised me: Google doesn’t have a standard rate for User Choice Billing? It’s making special deals for certain companies? “Disclosure of the Spotify deal would be very very detrimental for the negotiation we’d be having with these other parties,” argues Google attorney Glenn Pomerantz.

We won’t see big-name witnesses like Google’s or Epic’s CEOs tomorrow, but we did get a small preview of the weeks ahead: after Epic finishes making its main case, both parties will call their expert witnesses on app distribution, payment processing, profit margins, and computer science (re: security fears of sideloaded apps).

We may also not get document dumps during the case: exhibits will be filed after the jury verdict, Epic lead attorney Gary Bornstein said.

The “current model,” as of this August 2019 document, was that Google Play provided value by helping users discover apps, spend money on them, and deliver downloads at scale.

Marchak is repeatedly attempting to say this is an early model. Epic’s lawyer is repeatedly shutting him down.