Google gave phone makers extra money to ditch third-party app stores

Newly unredacted sections of Epic’s antitrust complaint against Google reveal new details on the lengths to which Google went to undermine third-party app stores on the Android platform. According to the new text, starting in 2019, Google ran a “Premier Device Program” that gave Android phone makers a greater share of search revenue than they would normally receive. In exchange, the OEMs agreed to ship their devices without any third-party app stores preinstalled. Specifically, they followed a rule that prohibited “apps with APK install privileges” without Google’s approval, leaving the Play Store as the only built-in digital marketplace for software.

As noted by Leah Nylen, products that qualified as a Premier Device would receive a 12 percent share of Google search revenue compared to the 8 percent they’d normally earn. Google sweetened the deal further for companies like LG and Motorola, offering them between 3 and 6 percent of what customers spent in the Google Play Store on their devices.

“Google’s Premier Device Program was not publicly known, and was not known to Epic, before Google recently began producing relevant documents in this litigation,” Epic’s lawyers wrote in the complaint. “Google has sought to conceal its most restrictive anticompetitive conduct by, among other things, including in the agreements themselves a provision restricting signatories from making ‘any public statement regarding [the] Agreement without the other party’s prior written approval.’”

The complaint goes on to paint the Premier Devices Program as a resounding success that has only further solidified the Play Store’s dominance.

By May 2020, many of the world’s largest and most popular Android OEMs had agreed to Google Play exclusivity for most of their new Android devices. Motorola and LG both committed nearly all (98 percent and 95 percent) of their devices to the Premier program. The giant Chinese conglomerate BBK — which manufactures and sells a range of Android devices under its Oppo, Vivo, and OnePlus brands, among others, had designated around 70 percent of its new devices as “Premier.”

Here’s where Epic goes into detail on the Premier Device Program:

Other companies like Sony (50 percent) and Xiaomi (40 percent) weren’t as committed to the program. Still, Epic argues in its complaint that the program effectively tilted the scales against third-party stores on Android.

Another newly public section of the complaint shows how rare it is for people to venture outside the Play Store’s walls. Epic says that an internal Google report from 2017 found that “app installations through channels other than Google Play (including direct downloads and competing app stores) amounted to a mere 4.4 percent of Android app downloads in the United States.”