Roku Could Lose YouTube App in December as It Remains at Odds With Google Over Distribution Terms

Roku alleges Google is still making anticompetitive demands; Google calls the claims 'baseless'

Roku - YouTube and Google

UPDATED: Roku wants its customers to know: The streaming platform company is still battling Google over what it alleges are the internet giant’s anticompetitive demands for carrying YouTube.

According to Google, with the stalemate in deal talks, the distribution of YouTube on all new Roku devices is set to end on Dec. 9.

Back in April, Roku’s deal to distribute YouTube TV expired and Roku removed the app from its channel store. That came after the two sides failed to reach a renewal, over what Roku said was Google’s insistence on specific YouTube search and data-sharing requirements — which Google does not ask of Roku’s rivals. (Roku continues to provide access to YouTube TV for subscribers who already had installed the channel.) YouTube responded by launching a feature that will let users access to YouTube TV from within the YouTube app, starting on Roku devices.

Six months later, according to Roku, Google is still refusing to budge and is still engaged in illegal monopolistic conduct.

In a blog post Thursday, Roku said it continues to pursue a deal with Google to continue to offer YouTube TV but that “the threat remains that Google may remove YouTube TV from the Roku platform.”

“Importantly, our concerns with Google are not about money,” Roku said in the post. “We have not asked for a single change in the financial terms of our existing agreement. In fact, Roku does not earn a single dollar from YouTube’s ad supported video sharing service today, whereas Google makes hundreds of millions of dollars from the YouTube app on Roku.”

According to Roku, there are two main issues that remain sticking points under its 2019 agreement with Google for YouTube distribution. First, Google continues to “interfere with Roku’s independent search results, requiring that we preference YouTube over other content providers.” Second, Google discriminates against Roku “by demanding search, voice and data features that they do not insist on from other streaming platforms.” Under their current deal, for example, Google mandates that YouTube have a dedicated search-results row and blocks Roku from surfacing non-YouTube content in YouTube search results.

In a statement to Variety, a Google rep said, “Since our negotiations with Roku earlier this year, we’ve continued to work with them to find a resolution that benefits our mutual users. Roku has once again chosen to make unproductive and baseless claims rather than try to work constructively with us. Since we haven’t been able to continue our conversations in good faith, our partnership for all new Roku devices will unfortunately end on December 9. We are, however, giving Roku the ability to continue distributing both YouTube and YouTube TV apps to all existing users to make sure they are not impacted.”

To bolster its point that Google is making unfair demands, Roku shared an email dated Sept. 23, 2019, from a YouTube “senior executive” sent to a top Roku exec (with the names redacted) that said in part, “YouTube position: A dedicated shelf for YT is a must.” The email acknowledged that Roku’s position was that YouTube results should be mixed in with other video content providers and that Roku should be able to “control how shelves and content within shelves are ranked and ordered.”

Roku’s blog post was addressed to “our customers” but it also appears aimed at lawmakers and regulators who are looking to rein in the power of Google and other large tech companies. The difficulty that Roku faces in trying to negotiate with a company as massive as Google is the same as “numerous other independent companies,” according to Roku. In addition, Roku noted that Google is under investigation by the U.S. Justice Department and more than 30 state attorneys general for potential violations of competition laws; in fact, Google has been the target of several antitrust lawsuits brought by the DOJ and state AGs.

Roku’s complaints about Google did catch the ear of Sen. Amy Klobuchar (D-Minn.), chair of the Senate Judiciary Subcommittee on Competition Policy, Antitrust and Consumer Rights. Earlier this month, Klobuchar and Sen. Chuck Grassley (R-Iowa) introduced the American Innovation and Choice Online Act, aimed at restoring competition online by preventing dominant digital platforms — like Google — from “abusing their market power to harm competition, online businesses and consumers.”

“Roku’s claim that Google requires the company to preference YouTube content over that of other providers in Roku’s search results highlights why we need new laws to prevent dominant digital platforms from abusing their power as gatekeepers,” Klobuchar said in a statement. “For too long, the big tech platforms have leveraged their power to preference their products and services over those of thousands of smaller online businesses. They have said ‘just trust us,’ but experience has shown that we can’t rely on these companies to act fairly in the marketplace.”

In its blog post, Roku outlined what it said are its principles for “mutually beneficial” content partnerships:

  • An unrivaled streaming experience for customers
  • Access to an enormous selection of free or affordable choices
  • Transparency about the collection and use of consumer data
  • Mutually beneficial financial terms that enable continued growth and innovation

“We continue to believe that streamers stand to benefit from Google and Roku reaching a fair agreement and we remain committed to trying to achieve that goal,” Roku said in the post. “For Roku, this is about maintaining our independence, protecting our customers, and ensuring healthy competition in the streaming industry that benefits millions of consumers.”