Epic claims Google paid $360 million to prevent Activision from launching its own app store

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Activision Blizzard and Riot Games at one point told Google they could launch their own mobile app stores, according to new documents filed in Epic’s antitrust suit against the search giant. The details came to light as part of allegations about big deals 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.

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In one document, Google exec Karen Aviram Beatty recounts a conversation with Armin Zerza, Activision Blizzard’s current CFO, a month before the two companies signed the huge deal. “If this deal falls through, [Zerza] claims that they will launch their own mobile distribution platform (in partnership with another “major mobile company” – assume Epic)double up with Amazon/Twitch (or MSFT) for Cloud/eSports [sic]and move away from Stadia,” Beatty wrote (emphasis mine). While Zerza may have just been negotiating hard, Activision hasn’t launched its own app store on mobile yet, so it seems the company was happy with how the deal turned out in the end.

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

Project Hug similarities first came to light in August 2021 as part of an unredacted Epic complaint. But Epic claims in a recently amended complaint filed Thursday that Project Hug deals are designed to “prevent the developer from opening a competing store or otherwise distributing its apps outside of the Google Play Store.”

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Epic originally launched Fortnite outside of Google Play in 2018, which allowed it to sidestep Google’s fees, and Epic has already argued that Project Hug is designed to entice developers to stick with Play rather than create their own stores. (Epic eventually brought Fortnite to the Play Store in 2020, but it was removed a few months later.) But based on the new documents, it looks like Activision and Riot were thinking about breaking through on their own.

In statements to The edge, Google and Activision addressed Epic’s allegations. Google said programs like Project Hug don’t stop developers from creating their own app stores, and Activision said Google didn’t force them to compete with Google Play.

“Epic mischaracterizes business conversations”

“Epic misrepresents business conversations,” said Google spokesperson Michael Appel. “Programs like Project Hug encourage developers to provide benefits and early access to Google Play users when they release new or updated content; it doesn’t stop developers from creating competing app stores, as Epic falsely claims. In fact, the program is proof that Google Play competes fairly against countless 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 spokesperson Joe Christinat said. “Google has never asked, pressured or made us agree not to compete with Google Play. We have submitted documents and testimonials proving this. Epic’s claims are nonsense.”

Riot has not responded to a request for comment.

One of Epic’s exhibits also includes a list of more than 20 companies that Google has signed Project Hug (now technically the “Games Velocity Program”) with as of July 2022. Activision and Riot are both on the list, as are major gaming companies such as EA, Niantic, Nintendo, Tencent and Ubisoft.

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