Epic v. Google: everything we’re learning live in Fortnite court

Mickens came in with an agenda — he decided to “Examine whether the friction that Android imposes on non-Google Play Store app installation is justified by security concerns.” 

His conclusions, as presented to the jury:

Conclusion 1: “The friction imposed by an operating system during app installation should be proportional to the likelihood that the app is harmful (as determined by a high-quality security review)

Conclusion 2: The friction that Google imposes to installing apps via third-party channels is unwarranted and disproportionate to the security risks posed

Conclusion 3: By making small changes to Android, Google could reduce the unwarranted friction while preserving (or even strengthening) the status quo of security on Android today

He teaches a class on operating systems, another on computer security, and is co-director of the Berkman-Klein Center for Internet and Society and the Institute for Rebooting Social Media. He says he used to work for Microsoft Research, and has published papers on mobile device security including “the propagation of malware on mobile devices.”

Epic has submitted him as an expert witness on mobile device security — and Judge Donato agrees he’s qualified. On we go!

Epic lead attorney Gary Bornstein to Google lead attorney Glenn Pomerantz, as they walked back into the courtroom together.

Both were chatting in the hall; it’s not out of the ordinary for the two parties’ attorneys to get friendly from what I’ve seen. But the judge has also sometimes sent them explicitly to work something out re: witnesses, sealing, or scheduling. Do they have an idea to present Judge Donato after the break?

Update: Not yet; Judge Donato brought out the jury. Bornstein says he’s working out something with Google about playing a pair of video depositions, though.

One would think so: we know Xbox handed out many policy exceptions for streaming apps, and I bet some astute reader can figure out which of the ones at my link is Spotify.

We’re on break now, and Spotify’s deposition is done, without returning to the Coalition for App Fairness at all. What might we see when we return?

Alzetta says that unlike with many other companies, Google didn’t make its own payment system mandatory for Spotify to adopt — the very first time Google approached Spotify about adding Google Play Billing, it was with a proposal in hand.

Spotify’s Sandra Alzetta says it’s against the company’s “principles,” too, and that “strategically,” Spotify simply won’t do it, full stop.

Alzetta says Spotify has been forced to raise its prices over the years: “We had to increase our prices to consumer. We had to increase them significantly. That is not a good thing for a consumer.”

It is true that Spotify has rarely turned a profit; it generally prioritizes growth, which gives it the scale to broker deals like the zero-percent arrangement with Google.

We’re hearing a lot of assertions how hard Spotify has worked to build its own payment system and how important choice is to users (Alzetta says “we know that” choice results in increased conversion rates), but there was only a passing mention of the Coalition for App Fairness, a controversial lobbying group which, I revealed in 2021, was set up explicitly by Epic Games to help win its case.

It’s pretty rich to be a member of the Coalition for App Fairness and also work out a secret zero percent deal with Google that you want to keep hidden, isn’t it?

We are looking at a line in the actual agreement between Google and Spotify where Spotify made out like a bandit compared to other Android developers. It reads:

The program fees are payable on account of Google Play’s billing system services.

Epic’s lawyer asks: what about distribution? (Google has argued that Play provides massive scale distribution, security, and many other features in exchange for the fee.)

Spotify’s Alzetta says no — Spotify is only paying Google for payment processing. There were also “some commitments with regard to product” and a “marketing success fund” as part of the deal, but that’s it.

Spotify’s Sandra Alzetta is the one who brokered the secret deal, we’re learning — and she just confirmed in no uncertain terms what we learned yesterday about Google’s zero percent sweetheart deal for Spotify.

If users choose Google Play Billing to pay for Spotify, she says, Spotify only pays to cover Google’s cost to process the payment.

Judge James Donato is telling the jury that they will see more details about Spotify that won’t be revealed in public court. It’s the second time we’ve done that in this case — but the previous secret numbers eventually did get unsealed, revealing that Spotify had a secret deal to pay effectively nothing to Google for the Play Store.

Sandra Alzetta is Spotify’s head of commerce. We’re watching a video deposition from September 2022.

Amazon’s top recommendation to improve the Amazon Appstore in 2021 was to fix its installation instructions — because they were at least slightly wrong for phones as popular as the Samsung Galaxy S20.

However, the picture under “Turn on Unknown Sources” did not match the settings for numerous Android phones we tested (LG K30, Galaxy S9, Samsung Galaxy S20, Pixel 3, ASUS Zenfone Max [...])

Also, Google is pointing out that Amazon Fire tablets included sideloading scare screens as well:

Your tablet and personal data are more vulnerable to attack by unknown apps. By installing apps from this source, you agree that you are responsible for any damage to your tablet or loss of data that may result from their use.

Guess sideloading friction wasn’t just Google’s fault?

As of 2021, “Amazon had significantly fewer apps (456k) than Apple (1.85m) or Google (2.65m)” according to an Amazon doc.

I’m beginning to wonder, as we zip through an internal Amazon document from April 23rd, 2013 that identifies early strengths and weaknesses across various app stores. Are these things really Google’s fault?

Amazon received app updates later than Google

Amazon had outdated versions of some Amazon subsidiary apps compared to Google

Amazon was missing many key apps for non-Kindle [...]

Apple and Google’s merchandised content had a more curated and editorial feel

Kindle versions of some racing games appeared to have lower-quality graphics than Google or Apple versions.

Amazon provided limited personalized recommendations

Google and Apple provided more full and consistent app data

I’m very curious if there’ll be any documents to back up Morrill’s suggestion there.

Here are a couple of compelling things he said: the Amazon Appstore cannot be easily and automatically updated if it’s sideloaded — and so wouldn’t automatically receive security fixes from Amazon, either. That could cut against Google’s argument that its way is more secure.

We’re looking at the old “Hollywood” process to install the Amazon Appstore, one step at a time. Some of the steps are Amazon sign-in and download steps. Many of them are Google’s Android operating system steps. Added up, it looks like a LOT of friction.

But again, Google showed in court, in a video, that sideloading the Epic Games Store can take just 25 seconds now.

Amazon’s Donn Morrill says Google’s decision not to allow alternative app stores in Google Play “strongly discouraged users from discovering” and installing the Amazon Appstore on Android.

It was “materially part of the reason for the limitations of the Amazon Appstore on Android,” he says.

At one point, Amazon saw in testing, only 11 percent of users who visited the Amazon Appstore’s mobile install page wound up successfully installing it.

(That number appears to be for a proposal to replace Amazon’s “Hollywood” install flow with a newer “Spelljammer” install flow, though we clicked away before I could read more. I wonder if Spelljammer had better results.)

I’m not sure we’ve heard that number before — Amazon exec Donn Morrill just read it off a spreadsheet prepped by lawyers without questioning it. He says Amazon incurred roughly $1.4 billion in expenses on the Appstore from 2015 through 2021.

In 2018, roughly a third of the Appstore’s sales came from Android. By the end of 2021, it was less than 10 percent, he testified — with third-party Android devices (read: not Kindle Fire tablets) contributing “just north of $15 million.” That’s tiny. It helps make Epic’s point that a sideloaded app store isn’t really a viable competitor to Google Play on Android.

We’re done with Epic’s big-name witnesses like Google CEO Sundar Pichai and Epic CEO Tim Sweeney — who will come next? (We never did hear another peep about “father of Android” Andy Rubin’s video deposition, for that matter...)

We’ll probably begin with Amazon exec Donn Morrill, though, whose testimony barely began before the judge told us all to go home yesterday.

Last tidbit of the day: Amazon’s Donn Morrill says the Amazon Appstore’s actual commission rate was calculated at roughly 10 percent.

We also saw Amazon paid some developers one-time fees of up to $100,000 to develop apps and would sometimes offer other deals.

See you tomorrow! We’re off starting Wednesday, though, and will stay off through Thanksgiving and Black Friday.

We’re listening to video deposition from August 11, 2022, with Donn Morrill, a director of apps at Amazon who’s also worked with teams on the company’s Alexa voice assistant.

Google was once worried about Amazon stealing its whales, but that threat didn’t materialize, and it’s still not clear whether Google needed to change a thing to keep it from happening. Do we get that now, or will his deposition touch on a different facet of Android friction?

“We cannot sell out of PlayStation at a lower price than we sell on PlayStation,” says Epic CEO Tim Sweeney, referring to a most favored nations (MFN) clause in the contract with Sony.

That sounds familiar — I think we spotted something like that in a Sony contract during the Epic v. Apple trial, but I can’t find it at this moment.

Google tried to suggest this was shady since Sony is now an Epic Games shareholder, but Sweeney says it’s a standard part of PlayStation contracts.

And (minus a couple bits I didn’t quite catch) we’re done with Tim Sweeney. On to a taped deposition from an Amazon executive: Donn Morrill.

Epic: “Does Tencent control Epic?”

Sweeney: “No.”

“Who does?”

“I do. I’m the controlling shareholder of Epic.”

What about Tencent?

“I came up with the idea of Project Liberty, and when we disclosed to them, they were rather surprised.”

He says it’s converting at a “much lower rate than we’d estimate if we were on Google Play.”

Sweeney was absolutely brazen on the stand just minutes ago, looking a tad like a greedy exec, but he’s now Epic’s witness again.

Epic points out that Google never asked him how much Epic pays to put Fortnite on Windows or Apple computers.

“Microsoft gets nothing when we distribute Fortnite directly,” says Sweeney. How about Apple?

“Zero.”

“Mr. Sweeney, you testified that you’re not seeking damages, but your company would make hundreds of millions of dollars from the arrangement you see on this screen, right?” asked Google’s lawyer, pointing to a V-Bucks purchase screen where users see a higher price to use Google Play Billing.

“I think it would be billions of dollars!” Sweeney said.

Earlier:

The reason you would love that is because you can set both of these prices, and as long as you set the Google Play price even a little bit higher, more people will choose Epic direct payment, right? And when that happens, Google gets nothing, right?

“That’s right,” said Sweeney.

He said it would be “awesome!” if he could avoid paying Google anything.