Google’s secret deal lets Spotify bypass Android app store fees entirely

Google’s secret deal lets Spotify bypass Android app store fees entirely

Music streaming service Spotify has struck a unique and apparently very generous deal with Google for Android-based payments, according to new testimony in… Epic against Google trial. On the platform, Don Harrison, Google’s head of global partnerships, confirmed that Spotify paid a 0 percent commission when users chose to purchase subscriptions through Spotify’s own system. If users choose Google as their payment processor, Spotify offers 4 percent — much less than Google’s more common 15 percent fee.

Google has fought to keep Spotify’s numbers private during its antitrust battle with Epic, saying it could hurt negotiations with other app developers who might want more generous pricing. Google’s user choice billing program, which launched in 2022, is typically described as cutting about 4 percent of the Google Play Store’s commission if developers use their payment system, bringing Google’s 15 percent subscription service fee down to roughly 11 percent. This often saves developers little or no money, as they have to bear the cost of processing the payment themselves. In court, Google focused on benefits such as increased flexibility rather than cost savings.

But Harrison says Spotify’s “unprecedented” popularity was significant enough to warrant a “tailored” deal. “If we didn’t have Spotify working properly across Play Services and core services, people wouldn’t buy Android phones,” Harrison testified. As part of the deal, the two parties also agreed to allocate $50 million each to the Success Fund.

Google acknowledged Harrison’s testimony in a statement the edge. “A small number of developers who invest directly in Android and Play may have different service fees as part of a broader partnership that includes significant financial investments and product integrations across different form factors,” says company spokesman Dan Jackson. “These key investment partnerships allow us to bring more users to Android and Play by continually improving the experience for all users and creating new opportunities for all developers.”

Spotify has repeatedly complained about in-app purchase fees in the past. In mid-2023, it completely dropped support for Apple’s App Store billing system to avoid paying up to 30 percent commission, and was one of the most prominent early members of the Coalition for App Fairness, a group that included Epic and supported the fortnite Publisher’s antitrust lawsuit against Apple and Google. But while Epic continued its legal battle against both parties, Spotify appears to have found a much easier and cheaper way out of Google’s battle.

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