Music streaming service Spotify has struck a seemingly unique and very generous deal with Google for Android-based payments, according to new testimony from Epic vs. Google attempt. In fact, Google’s head of global partnerships Don Harrison confirmed that Spotify paid a 0 percent commission when users chose to buy subscriptions through Spotify’s own system. When users choose Google as their payment processor, Spotify pays 4 percent — much less than Google’s average fee of 15 percent.
Google fought to keep Spotify’s numbers private during its antitrust fight with Epic, saying it would hurt negotiations with other app developers who want higher rates. Google’s User Choice Billing program, which launches in 2022, is typically described as shaving about 4 percent off Google’s Play Store commission when developers use their own payment system, minus the 15 percent service fee. of Google subscription to 11 percent. That often saves developers little or no money because they have to cover the cost of payment processing themselves. And in court, Google focused on benefits like greater flexibility rather than cost savings.
But Harrison says Spotify’s “unprecedented” popularity is enough to justify a “special” deal. “If we don’t have Spotify working properly with Play services and core services, people won’t buy Android phones,” Harrison testified. As part of the deal, the two parties also agreed to commit $50 million each to a “success fund.”
Google acknowledged Harrison’s testimony in a statement on The Verge. “The 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 more financial investments and product integrations in different form factors,” said spokesman Dan Jackson. “These important investment partnerships allow us to bring more users to Android and Play by continuously improving the experience for all users and creating new opportunities for all developers.”
Spotify has often complained about in-app purchase fees in the past. By mid-2023, it is completely dropping support for Apple’s App Store billing system to avoid paying up to 30 percent commission, and it is one of the most high-profile early members of the Coalition for App Fairness, a group that includes Epic and support. THE Fortnite publisher’s antitrust suit against Apple and Google. But while Epic continues its legal battle against both parties, Spotify apparently found an easier – and cheaper – way out of the fight with Google.
