Epic claims Google paid $360 million to stop Activision from launching its own app store

Activision Blizzard and Riot Games once told Google they could open their own mobile app stores, according to new documents filed in Epic’s antitrust lawsuit against the search giant. The details came to light amid allegations of big deals being signed with the two companies. Google has reportedly agreed to pay Activision about $360 million over three years and Riot about $30 million for a one-year deal.

In a document, Google executive Karen Aviram Beatty recounts a conversation with current Activision Blizzard CFO Armin Zerza a month before the two companies signed the huge deal. “If this deal fails, [Zerza] asserts that They will launch their own mobile distribution platform (in partnership with another “big mobile company” – presumably Epic)double down with Amazon / Twitch (or MSFT) for Cloud / eSports [sic]and retire from Stadia,” Beatty wrote (emphasis Mine). While Zerza may have just been tough bargaining, Activision has yet to launch its own mobile app store, so it seems the company was happy with the outcome of the deal.

Another document is testimony from an unnamed witness who appears to be or was involved in “Project Hug,” Google’s program designed to incentivize and support Play Store developers. In the statement, the witness says Riot Games told Google it was considering launching a competing Android app store. Later, the witness says that “Riot and Activision Blizzard King were the ones who spoke to us most directly” as they considered opening their own app stores.

Project Hug agreements first came to light in August 2021 as part of an undedited Epic complaint. But Epic, in a newly amended complaint filed Thursday, claims that Project Hug’s deals are “intended to prevent the developer from opening a competing store or otherwise distributing its apps outside of the Google Play Store.”

Epic originally launched Fourteen days outside of Google Play in 2018, allowing it to bypass Google’s fees, and Epic has already argued that Project Hug was designed to entice developers to stay with Play rather than do their own business. (Epic eventually brought Fourteen days to the Play Store in 2020, but it was removed a few months later.) But based on the new documents, Activision and Riot appear to have considered going their own way.

In explanations to The edge, Google and Activision have denied Epic’s allegations. Google said programs like Project Hug don’t prevent developers from creating their own app stores, and Activision said Google didn’t make them not compete with Google Play.

“Epic mischaracterizes business talks”

“Epic mischaracterizes business conversations,” said Google spokesman Michael Appel. “Programs like Project Hug incentivize developers to give Google Play users benefits and early access when they release new or updated content. it doesn’t stop developers from creating competing app stores, as Epic falsely claims. In fact, the program is proof that Google Play competes fairly with numerous competitors for developers who have a range of options to distribute their apps and digital content.”

“Activision testified in court that Google and Activision never entered into an agreement that Activision would not open its own app store,” said Activision spokesman Joe Christinat. “Google never asked us, pressured us, or made us not compete with Google Play. We have presented documents and testimonies that prove this. Epic’s claims are nonsense.”

Riot did not respond to a request for comment.

One of Epic’s exhibits also includes a list of more than 20 companies that Google has signed Project Hug (now technically the “Games Velocity Program”) deals with since July 2022. Activision and Riot are both listed, as are major gaming companies like EA, Niantic, Nintendo, Tencent, and Ubisoft.

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