As per Phil Wainewright's defined definition for First Degree Mutil-tenancy in his blog on ‘Degrees of Multi-tenancy’, dated June 8th, 2009 as "First-degree Multi-tenancy is a purist model where every layer/component of the architecture is shared all the way down to the database."
Google App engine provides the runtime scalable platform for applications running in google infrastructure. The runtime environment is an abstraction above the operating system that allows App engine to manage resource allocation, computation, request handling, scaling and load distribution without the application’s involvement. So their run-time environment provides multi-tenancy at runtime environment level.
Next thing to identify is whether their datastore(not database) provides first degree multi-tenancy or not. Google App engine’s database system most closely resembles an object database(is sometime compared to BigTable). The design of app engine datastore is an abstraction that allows App engine to handle the details of distributing and scaling the application.Datastore entities are schemaless and most of the multi-tenant defintions are being defined for relational databases.
Every datastore entity has a unique key that is either provided by the application or generated by App engine. The key is not a property, but an independent aspect of entity. But Google App engine appends the app-id defined in applications configuration to the key while storing this entity in datastore(not visible to application), but stores the entities in distributed datastores. So this can't be said that entities created for a given kind by a given application will be stored in the same datastore. But while reading the entities from the datastore, the app-id is always enforced to check that entities created by one application are not shared with another application.
So in that scenario, the google app engine can be called as first degree multi-tenant platform for applications. But application build on Google App engine are not multi-tenant by default and kindly check this http://apps.gepportal.com/products-getting-started/isv for more details.Support for multi-tenant applications is in process, but for now, applications can get part of the way there by using hooks in the datastore to namespace all of the entities for a particular user/tenant.