The second antitrust trial against Google, this one focused on its app store policies, has released an exclusive sweetheart deal the internet giant proposed to Netflix in 2017. The company offered Netflix a drastically reduced fee of only 10 percent for using the Google Play app store for subscriptions, a significant departure from the 30 percent tax typically charged.
The Verge reports that the tech industry was shocked by the recent disclosure of a 2017 offer made by Google to Netflix. According to internal documents presented in the second antitrust trial against the internet giant, Google proposed a unique arrangement to Netflix, branding them as a “platform development partner” under a program named “LRAP++”. This deal would have reduced Netflix’s payment obligations to Google Play to a mere 10 percent of its in-app revenue, a striking contrast to the standard 30 percent fee imposed on most app developers.
MARSEILLE, FRANCE – MAY 04: (L-R) Reed Hastings (Netflix CEO) and Ted Sarandos (Netflix Chief Content Officer) (Photo by Stephane Cardinale/Corbis/Corbis via Getty Images)
This proposal, part of Google’s efforts to retain major players like Netflix on its platform, was made at a time when the streaming giant was contemplating bypassing Google Play for its subscription sign-ups. The deal stipulated a full commitment from Netflix to Google Play Billing (GPB) on a global scale. However, Netflix declined the offer, opting instead to direct users to subscribe via a web browser, thus avoiding any fees to Google.
Netflix’s refusal of the offer was partially based on financial forecasts suggesting potential revenue loss even at the reduced 10 percent rate. Internal estimates indicated that if all Android app sign-ups were through Google, Netflix could lose approximately $250 million USD in one year, even after considering the incremental boost from in-app signups.
Google’s unconventional offer to Netflix highlights the competitive dynamics within the app store marketplace, where tech giants like Google and Apple often wield significant power over app developers. However, it also reflects the growing clout of content providers like Netflix, which have the leverage to negotiate more favorable terms.
The details of this deal came to light amid a broader legal battle between Epic Games and Google, where the latter is accused of monopolistic practices in how it runs the Google Play Store.
Read more at the Verge here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.