UPDATED: Simmering tensions between Roku and Google have erupted into a full-blown fight.
On Monday, Roku began warning YouTube TV customers that Google’s internet pay-TV service may go dark on the Roku platform soon — alleging that Google is seeking anticompetitive terms.
“We are sending this email to update you on the possibility that Google may take away your access to the YouTube TV channel on Roku,” Roku said in an email notice to customers. “Recent negotiations with Google to carry YouTube TV have broken down because Roku cannot accept Google’s unfair terms as we believe they could harm our users. “
According to Roku, as a condition for carrying YouTube TV, Google among other things is demanding Roku grant the separate YouTube app special search privileges and access to data on Roku users. The current dispute does not immediately affect the YouTube app’s distribution on Roku.
“Google is attempting to use its YouTube monopoly position to force Roku into accepting predatory, anticompetitive and discriminatory terms that will directly harm Roku and our users,” Roku said in a statement Monday. “Given antitrust suits against Google, investigations by competition authorities of anti-competitive behavior and congressional hearings into Google’s practices, it should come as no surprise that Google is now demanding unfair and anticompetitive terms that harm Roku’s users.”
Asked for comment about Roku’s claims, a Google rep provided this statement: “We have been working with Roku in good faith to reach an agreement that benefits our viewers and their customers. Unfortunately, Roku often engages in these types of tactics in their negotiations. We’re disappointed that they chose to make baseless claims while we continue our ongoing negotiations. All of our work with them has been focused on ensuring a high-quality and consistent experience for our viewers. We have made no requests to access user data or interfere with search results. We hope we can resolve this for the sake of our mutual users.”
Roku said the dispute is not over economic terms, claiming the company is not asking for higher fees to carry YouTube TV. The crux of the spat, according to Roku, is that Google wants to prevent Roku from displaying search results from third-party services (e.g., HBO Max or Netflix) if a user has the YouTube app open.
In addition, one of Google’s stipulations in its renewal talks with Roku for YouTube TV is that Roku agree to future hardware specs as set by Google. Google’s Chromecast device competes with Roku’s streaming media players.
“We are disappointed that Google has so far refused to accept our proposal to extend YouTube TV on Roku,” Roku said in the statement. “Roku is not asking Google for a single additional dollar in value. We simply cannot agree to terms that would manipulate consumer search results, inflate the cost of our products and violate established industry data practices. Google is already under fire from governments around the world for manipulating search results. It is outrageous that Google would now try to insist on manipulating Roku’s search results as well.”
Roku continued, “We believe consumers stand to benefit from Google and Roku reaching a fair agreement that preserves consumers access to YouTube TV, protects user data and promotes a competitive, free and open marketplace. We are committed to trying to achieve that goal.”
On the surface, the standoff appears similar to the decades-old carriage disputes between pay-TV operators and networks. Roku itself has been embroiled in several public spats over distribution terms with content providers: Last year, for example, it held out for months before agreeing to carry WarnerMedia’s HBO Max and NBCUniversal’s Peacock.
But Roku says the current Google fight is different, representing Google’s abuse of its dominant position with YouTube in order to extract unfair content-search advantages and put Roku’s hardware business at the mercy of Google’s technical demands.
Roku is one of the most widely used connected-TV platforms: It ended 2020 with 51.2 million active accounts, up 39% year over year. The company makes virtually all its profit through ad sales and revenue-sharing deals with content partners. In recent months, it has stepped up its strategy to monetize viewing on the free, ad-supported Roku Channel, including through the acquisition of Quibi’s library of shows and This Old House Ventures.