Google offered Netflix a special deal on in-app payments

Documents and testimony from the ongoing Epic v. Google trial revealed that Google offered special treatment to Netflix too, though the streaming giant didn’t go for it.

Earlier this week, the trial revealed that Google and Spotify had a special deal through the search giant’s relatively new ‘User Choice Billing‘ system, which allows app developers to use their own payment system rather than Google’s while still giving Big G a cut of the money. Google fought — and succeeded — in keeping the numbers in that deal from being publicly revealed, per The Verge.

As for the deal with Netflix, we learned that Google offered the streamer a discounted rate of 10 percent of in-app payment revenue in 2017, down from the regular 15 percent rate it charged.

Netflix’s vice president of business development, Paul Perryman, shared details of the deal in a 2022 video deposition that was aired in the courtroom, according to The Verge. Perryman said that when Netflix could offer its own method of payment, it paid closer to three percent, but Google cut that off. However, Perryman said that before Google killed alternative payment mechanisms, it offered Netflix the special 10 percent deal to move to Google Play Billing (GPB) voluntarily in hopes Netflix wouldn’t take all the revenue away.

Specifically, the deal was to bring “revshare to 10% on the condition that Netflix have a full commitment to GPB globally.” A document shown in the courtroom noted that the deal was only offered to Netflix at that point.

Netflix didn’t take the deal and instead directed people who downloaded the app to subscribe and pay in a mobile browser instead, effectively dodging GPB entirely. Other internal documents shown in court revealed that Netflix forecasted it might lose money at 10 percent revshare compared to browser-based sign-ups. Interestingly, we learned during the Epic v. Apple trial that Netflix did take a deal from the iPhone maker.

Instead of contesting the details, Google’s attorney pointed out that Netflix is available practically everywhere, essentially saying (without actually saying) that Netflix can afford to bypass GPB and rely on browser sign-ups.

It’s worth noting that Google offers different rates to different apps, with a spokesperson telling The Verge that the company considered the economics of different industries when setting rates. For example, the company’s Play Media Experience Program offers rates as low as 10 percent to apps that offer video, audio, or books.

But while Google acts like it’s “no secret” that it offers different fees, the company has refused to talk about which companies get special deals and has fought to protect the terms of deals the public knows about, like one with Spotify.

Source: The Verge