Google struck a $360 million deal with Activision to block its rival app store, the lawsuit says

OAKLAND, Calif., Nov 17 (Reuters) – Alphabet Inc.’s (GOOGL.O) Google has struck at least 24 deals with major app developers to keep them from competing with its Play Store, including a deal Activision Blizzard Inc. (ATVI.O) about $360 million over three years, according to a court filing Thursday.

Google also agreed in 2020 to pay the Riot Games unit of Tencent Holdings Ltd (0700.HK), which earns “League of Legends,” about $30 million over a year, the filing said.

The financial details surfaced in a newly unredacted copy of a lawsuit that “Fortnite” video game maker Epic Games first filed against Google in 2020. It alleged anti-competitive practices related to the search giant’s Android and Play Store businesses.

Google has called the lawsuit baseless and full of false characterizations. It said its deals to keep developers happy reflect healthy competition.

Riot said it will review the filing. Activision did not respond to requests for comment.

Epic largely lost a similar case against Apple Inc (AAPL.O), the other top app store provider, last year. An appeal verdict in that case is expected next year.

Google’s agreements with developers are part of an internal effort known as “Project Hug,” and were described in previous versions of the lawsuit without the exact terms.

Compensation includes payments for posting on YouTube and credits for Google ads and cloud services.

The deal with Activision was announced in January 2020, shortly after telling Google it was considering launching its own app store. The partnership with Riot also aimed to “stop their efforts to create an in-house ‘app store,'” according to the court filings.

At the time, Google predicted billions in revenue losses in the app stores if developers fled to alternative systems.

Epic’s lawsuit alleges that Google knew that signing with Activision “effectively ensured that (Activision) would abandon its plans to launch a competing app store.” The agreement increases prices and lowers quality of service, the lawsuit added.

Among others who signed with Google in July were game makers Nintendo Co (7974.T) and Ubisoft Entertainment SA (UBIP.PA), meditation app Calm and educational app company Age of Learning, according to court filings .

Reporting by Paresh Dave; Edited by Jonathan Oatis, Richard Chang and Josie Kao

Our standards: The Thomson Reuters Trust Principles.

Father Dave

Thomson Reuters

Tech reporter from the San Francisco Bay Area covering Google and the rest of Alphabet Inc. Joined Reuters in 2017 after four years at the Los Angeles Times focusing on the local technology industry.


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