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

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

In a document, Karen Aviram Beatty, head of Google, reports on a conversation with Armin Zerza, now chief financial officer of Activision Blizzard, a month before the two companies signed the huge agreement. “If this deal falls through, [Zerza] affirm that they will launch their own mobile distribution platform (in partnership with another “big mobile company” – suppose Epic)double up with Amazon / Twitch (or MSFT) for Cloud / eSports [sic]and stay away from Stadia,” Beatty wrote (accent mine). While Zerza may have just done some sweeping negotiations, Activision has yet to launch its own mobile app store, so it seems the company was happy with how the deal ultimately unfolded.

Another document is a deposition from an anonymous witness who appears to be someone who is or was involved with “Project Hug”, Google’s program designed to incentivize and support Play Store developers. In the deposition, the witness says Riot Games told Google it was considering launching a competing Android app store. Later, the witness said that “Riot and Activision Blizzard King were the ones who were most direct with us” in considering creating their own app stores.

Project Hug’s deals were first revealed in August 2021 as part of an unredacted Epic complaint. But Epic, in a newly amended lawsuit filed Thursday, alleges Project Hug’s agreements are designed to “prevent the developer from opening a competing store or distributing its apps outside of the Google Play Store.”

Epic was originally launched Fortnite outside of Google Play in 2018, which allowed it to bypass Google fees, and Epic has previously argued that Project Hug was designed to entice developers to stick with Play instead of creating their own stores. (Epic finally brought Fortnite to the Play Store in 2020, but it was removed a few months later.) But based on the new docs, it looks like Activision and Riot were planning to go it alone.

In statements to The edge, Google and Activision pushed back against Epic’s claims. Google said programs like Project Hug don’t prevent developers from building their own app stores, and Activision said Google didn’t force them to agree not to compete with Google Play.

“Epic misrepresents professional conversations,” Google spokesperson Michael Appel said. “Programs like Project Hug incentivize developers to offer benefits and early access to Google Play users when they release new or updated content; this does not prevent developers from creating competing app stores, as Epic falsely claims, in fact, the program is proof that Google Play competes fairly against many rivals for developers, who have a number of choices for distributing 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,” Activision spokesman Joe Christinat said. “Google has never asked, pressured, or made us agree not to compete with Google Play. We have submitted documents and testimonials that prove this. Epic’s allegations are nonsense.

Riot did not respond to a request for comment.

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