A court agreement reached May 20 allows Bandcamp, an internet music company owned by Epic Games, to temporarily continue operating its existing payment system on Android devices, rather than being forced to adopt Google’s payments system. The joint stipulation agreement will remain in place until Epic Games’ antitrust case against Google is resolved.
Owner of the popular game Fortnite, Epic Games acquired Bandcamp in March and subsequently filed a motion for a preliminary injunction against Google regarding Google Play Store policies. That motion alleges that Google’s conduct “violates the Sherman Act, the Cartwright Act, and California’s Unfair Competition Law.” According to the just-completed joint stipulation, Google will refrain from de-listing or removing Bandcamp from the Google Play Store and also must refrain from delaying or refusing to distribute Bandcamp app updates.
Following the temporary agreement, Bandcamp Co-Founder and Chief Executive Officer Ethan Diamond updated a blog post, stating that Bandcamp will place in escrow 10% of the revenue generated from digital sales on Android devices until the Epic Games case against Google is resolved. As part of that future case resolution, the court will decide whether Epic Games or Google will receive those escrowed funds, based on whether the court deems Google’s payments system to be anticompetitive.
That 10% figure is one of the more interesting aspects of the joint stipulation. Google’s typical commissions on in-app purchases range from 15% to 30%, but according to Epic Games’ original court filing, Google had already offered Bandcamp a reduced fee of 10% in exchange for other concessions. However, Epic Games argued that even the 10% fee would force it to “change Bandcamp’s current business model or else operate the Bandcamp business at a long-term loss.”
Diamond also stated in an April blog post that the 10% fee would require Bandcamp to do one of the following: Pass Google’s fees on to consumers, making Android a less attractive platform for music fans; pass fees on to artists, something Bandcamp would never do; permanently run Bandcamp’s Android business at a loss; or turn off digital sales in the Android app. All of these options are obviously unappealing for Diamond and Bandcamp.