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Google agreed to pay Activision $360 million to block rival App Store, says Epic Games lawsuit

Alphabet’s Google has struck at least 24 deals with major app developers to avoid competing with the Play Store, including an agreement to pay Activision Blizzard about $360 million (approximately Rs. 2,941 crore) over three years, according to a lawsuit on Thursday .

Google also agreed in 2020 to pay Tencent Holdings’ Riot Games unit, which brings up League of Legends, about $30 million (approximately Rs. 245 crore) over a year, the filing said.

The financial details surfaced in a new, unredacted copy of a lawsuit 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 called the lawsuit baseless and full of mischaracterizations. It said its deals to keep developers happy reflect healthy competition.

Riot said it was reviewing the application. Activision did not respond to requests for comment.

Epic largely lost a similar case against Apple, the other leading app store provider, last year. An appeal decision in that case is expected next year.

The Google developer agreements are part of an internal effort known as “Project Hug” and were described in earlier drafts of the lawsuit without the exact terms.

The compensation includes payments for posting to YouTube and credits for Google ads and cloud services.

The deal with Activision was announced in January 2020, shortly after it told Google it was considering launching its own app store. The partnership with Riot was also intended to “stop their internal ‘app store’ efforts,” according to court documents.

At the time, Google predicted billions of dollars in lost app store sales if developers fled to alternate systems.

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

Among others who signed with Google as of July were game makers Nintendo and Ubisoft Entertainment, meditation app Calm and education app company Age of Learning, according to the court documents.

© Thomson Reuters 2022

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