Lawsuit claims Google offered Netflix favorable terms over Play Store fees

Apple wasn't the only digital storefront to offer Netflix a deal to keep the streaming service using the App Store payment system, as Google apparently offered to take a lower cut from Android-based subscriptions.

During Apple's trial with Epic, it was revealed Apple attempted to keep Netflix from removing its subscription option from the iOS app by offering better terms. In an unsealed consumer lawsuit against Google, it appears the search company had the same problem.

A document from the potential class-action lawsuit claims major services including Netflix, Spotify, and Tinder wanted to get around Google Play Billing, with Netflix wanting to use an alternate payments system, according to The Verge. In an attempt to make the video streaming service happy, Google "offered to take a significantly reduced revenue share percentage to Netflix," the complaint asserts.

Though there are few details in the lawsuit, it does indicate that Google went through the same growing pains as Apple with regards to Netflix.

In the case of Apple, documents in the Epic lawsuit revealed Apple attempted to negotiate with Netflix, including offering an Apple TV bundle, in-depth performance data, for Netflix to join a "video partner program," email promotions by Apple, and promotions within Apple Stores.

It seems that attempts by Netflix to directly collect credit card details from Android users rather than using Google's payment system led to a "clarification" to developers requiring Play Store apps to use Google's transaction service.

The complaint offers more statements echoing Apple's lawsuit, with it claiming that the 30% standard Play Store commission was high and could be feasibly reduced. Quoting internal Google communications, the document says the Ply Store could break even with a fee of 6%, and that its decision to charge 30% has "no rationale, other than copying Apple."

10 Comments

DAalseth 3033 comments · 6 Years

About 3 years ago

So what? Google, Apple, all the online stores have the right to negotiate whatever terms they want with any customer. They could tell company X they want a 30% cut, company Y a 100% cut, and company Z a 1% cut. That's their choice and it's just between the store and the company. Do you think Walmart has exactly the same terms with all of the vendors in their store? Target? Canadian Tire? Amazon? Of course not. In the case of Netflix you can't even claim it was some kind of market limitation, because it's available on multiple platforms including Roku, and over the web. I honestly don't see what grounds somebody outside of the deal is suing over.

22july2013 3725 comments · 11 Years

About 3 years ago

DAalseth said:

So what? Google, Apple, all the online stores have the right to negotiate whatever terms they want with any customer. They could tell company X they want a 30% cut, company Y a 100% cut, and company Z a 1% cut. That's their choice and it's just between the store and the company. Do you think Walmart has exactly the same terms with all of the vendors in their store? Target? Canadian Tire? Amazon? Of course not. In the case of Netflix you can't even claim it was some kind of market limitation, because it's available on multiple platforms including Roku, and over the web. I honestly don't see what grounds somebody outside of the deal is suing over.

All true. The people who hate Apple think that Apple is a public service and that Apple has no right to create its own terms of service. Those terms, they say, should be created by public consensus, or the government, or Apple's competitors.

All corporations, including Apple, have the same freedoms as individuals in society. But most people don't get that. And people also don't get that all corporations are ultimately owned by, guess what, individuals. On the other hand, we free individuals have the right to not buy from Apple if we so choose. So I support people's right to hate Apple.

hammeroftruth 1354 comments · 16 Years

About 3 years ago

22july2013 said:

DAalseth said:

So what? Google, Apple, all the online stores have the right to negotiate whatever terms they want with any customer. They could tell company X they want a 30% cut, company Y a 100% cut, and company Z a 1% cut. That's their choice and it's just between the store and the company. Do you think Walmart has exactly the same terms with all of the vendors in their store? Target? Canadian Tire? Amazon? Of course not. In the case of Netflix you can't even claim it was some kind of market limitation, because it's available on multiple platforms including Roku, and over the web. I honestly don't see what grounds somebody outside of the deal is suing over.

All true. The people who hate Apple think that Apple is a public service and that Apple has no right to create its own terms of service. Those terms, they say, should be created by public consensus, or the government, or Apple's competitors.

All corporations, including Apple, have the same freedoms as individuals in society. But most people don't get that. And people also don't get that all corporations are ultimately owned by, guess what, individuals. On the other hand, we free individuals have the right to not buy from Apple if we so choose. So I support people's right to hate Apple.

It’s almost like they don’t understand contract law at all. If you don’t like the terms, DON’T sign the contract.

You are correct that individuals and corporations share the same freedoms, that is not the issue. Ignorance of the law is. We are a capitalistic society, so the market sets prices, not the government.

No developer was forced to enter a contract, they could have walked away, but they took it.

Years ago when the iTunes store was getting started, Apple and NBC entered a contract to allow customers to buy episodes of their favorite shows for $2. After a year, NBC decided they were not making enough money on the deal and decided not to renew their contract. They didn’t break it, they didn’t sue, they asked for more money but didn’t get it. They even tried their own store and it failed miserably. They came back after all of that.

The point is, they didn’t go whining to a judge to try to renege or force better contract terms for them.

gatorguy 24607 comments · 13 Years

About 3 years ago

hammeroftruth said:

22july2013 said:

DAalseth said:

So what? Google, Apple, all the online stores have the right to negotiate whatever terms they want with any customer. They could tell company X they want a 30% cut, company Y a 100% cut, and company Z a 1% cut. That's their choice and it's just between the store and the company. Do you think Walmart has exactly the same terms with all of the vendors in their store? Target? Canadian Tire? Amazon? Of course not. In the case of Netflix you can't even claim it was some kind of market limitation, because it's available on multiple platforms including Roku, and over the web. I honestly don't see what grounds somebody outside of the deal is suing over.

All true. The people who hate Apple think that Apple is a public service and that Apple has no right to create its own terms of service. Those terms, they say, should be created by public consensus, or the government, or Apple's competitors.

All corporations, including Apple, have the same freedoms as individuals in society. But most people don't get that. And people also don't get that all corporations are ultimately owned by, guess what, individuals. On the other hand, we free individuals have the right to not buy from Apple if we so choose. So I support people's right to hate Apple.

It’s almost like they don’t understand contract law at all. If you don’t like the terms, DON’T sign the contract.

Years ago when the iTunes store was getting started, Apple and NBC entered a contract to allow customers to buy episodes of their favorite shows for $2. After a year, NBC decided they were not making enough money on the deal and decided not to renew their contract. They didn’t break it, they didn’t sue, they asked for more money but didn’t get it. They even tried their own store and it failed miserably. They came back after all of that.

https://appleinsider.com/articles/07/08/31/nbc_may_not_renew_itunes_contract_with_apple_report
https://appleinsider.com/articles/08/09/09/nbc_returns_to_itunes_for_65_million_viewers_and_hd_action
Yeah, a couple of really old AI articles, which are getting harder to discover. :)

EDIT: For those members who are interested in what "the forum" first looked like and who some of the regulars were back then:
http://forums.appleinsider.com/cgi-bin/Ultimate.cgi?action=intro
EDIT2: You won't be able to access it that way. try this link instead:
https://web.archive.org/web/20000229172058/http://forums.appleinsider.com/cgi-bin/Ultimate.cgi?action=intro

@sdw was around then.