Google closed $360m Activision deal to block rival app store, lawsuit says

OAKLAND, Calif., Nov 17 (Reuters) – Alphabet Inc’s (GOOGL.O) Google has struck at least 24 deals with major app developers to avoid competing with the Play Store, including an agreement to buy Activision Blizzard Inc (ATVI. O) about $360 million over three years, according to a court filing Thursday.

Google also agreed in 2020 to pay Tencent Holdings Ltd’s Riot Games unit (0700.HK), which makes “League of Legends,” about $30 million over a year, the filing said.

The financial details emerged 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 company’s Android and Play Store business. the search giant.

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 last year against Apple Inc (AAPL.O), the other leading app store provider. 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 Co (7974.T) and Ubisoft Entertainment SA (UBIP.PA), the meditation app Calm and the educational app company Age of Learning, according to the court documents.

Reporting by Paresh Dave; Edited by Jonathan Oatis, Richard Chang and Josie Kao

Our Standards: The Thomson Reuters Principles of Trust.

Parish Dave

Thomson Reuters

San Francisco Bay Area-based tech reporter covering Google and the rest of Alphabet Inc. Joined Reuters in 2017 after four years at the Los Angeles Times focusing on the local technology industry.

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