Under-the-radar agreement with Google let Spotify avoid Android’s app store charges،
Earlier this month, the second Epic vs. Google lawsuit began. Epic Games, the brains behind Fortnite, is suing Google, claiming the tech giant is offering substantial sums of money to big developers to persuade them to keep their apps on the Play Store. As the trial unfolds, it has emerged that Google offered $147 million to Epic Games to launch Fortnite on the Play Store, and now more intriguing details are emerging in the courtroom. The edgeRecent testimony in the Epic v. Google lawsuit reveals a unique and exceptionally generous deal between music streaming service Spotify and Google for Android-based payments.
During the trial, Don Harrison, Google’s head of global partnerships, confirmed that Spotify paid a 0% commission when users chose to purchase subscriptions through Spotify’s own system. If users chose Google as their payment processor, Spotify paid them 4%, a significant departure from the standard 15% fee.
Google’s User Choice Billing program, launching in 2022, reduces the Play Store commission by around 4% for developers using their payment system. This brings Google’s 15 percent subscription service fee to around 11 percent. However, the actual savings for developers are often minimal, as they are the ones bearing the payment processing fees.
Google fought to keep Spotify’s numbers private during its antitrust battle with Epic, arguing that disclosing those details could impact negotiations with other app developers seeking lower prices.
Harrison justified the unique deal with Spotify, citing the music streaming service “unprecedented“popularity as a reason to hit one”custom made” agreement. He testified, “If Spotify doesn’t work seamlessly across Play Services and Core Services, people won’t buy Android phones.“.
In response to The Verge, Google acknowledged Harrison’s testimony in a statement. Spokesman Dan Jackson explained: “A small number of developers who invest more directly in Android and Play may have different service fees as part of a broader partnership that includes substantial financial investments and product integrations across different form factors..”
Google, however, did not disclose the names of other developers benefiting from more advantageous rates. During the trial, it was revealed that Google offered Netflix a 10% discounted rate, which the streaming giant refused.
In the past, Spotify has voiced its grievances regarding in-app purchase fees. For example, the Swedish company recently reiterated its opposition to Apple’s App Store policies, accusing the Cupertino-based company of unfair practices.
