In the Epic court proceedings, additional details about Google’s business practices with exclusive partners have come to light. According to documents and statements in the trial, in 2017, Google attempted to persuade Netflix to exclusively use its payment system at a lower fee rate—similar to what they tried with Epic.
As reported by The Verge, under the proposed deal, Netflix was supposed to pay only 10 percent to Google but exclusively use Google’s payment mechanism, Google Play Billing (GPB). Without the offered deal, the standard rate would have been 15 percent—Google’s fees for in-app purchases with recurring subscriptions. Previously, Netflix used its own payment service in the Android app and paid only around 3 percent in fees to Google, as stated by Netflix manager Paul Perryman.
However, Google subsequently discontinued the option for apps to use their own payment service within the app. Shortly before this change, the company allegedly presented Netflix with the offer of the reduced fee rate of 10 percent.
Google would have designated Netflix as a Platform Development Partner, making the streaming service the only company with such a deal at that time.
Despite the offer, Netflix declined because the exclusive arrangement wouldn’t have been beneficial for the streaming service. Instead, Netflix outsourced the payment process: subscribers initiate registration in the Netflix Android app and are redirected to the Android device’s system browser to complete the ordering process. As a result, the streaming service doesn’t pay fees to Google, even though the Netflix app is available on the Play Store.
Compared to the current method, Netflix would have lost approximately $250 million annually if they had exclusively used GPB, as opposed to their outsourced solution.
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