In the ongoing Epic vs. Google trial, new revelations indicate that Spotify has struck an unconventional and seemingly generous deal with Google regarding Android-based payments.
Testifying in court, Google’s head of global partnerships, Don Harrison, confirmed that Spotify paid 0 percent commission when users opted to subscribe through Spotify’s own system.
However, if users choose Google as their payment processor, Spotify has to pay a lower commission of 4 percent, which is significantly lower than Google’s standard 15 percent fee.
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Google initially sought to keep the details of the Spotify deal confidential, arguing that disclosure could impact negotiations with other app developers seeking more favorable rates.
Google’s User Choice Billing program, introduced in 2022, typically reduces Play Store commissions to about 4 percent if developers use its payment system, reducing the 15 percent subscription service fee to about 11 percent. Are.
This often results in minimal savings for developers, who are responsible for covering payment processing costs. In court, Google emphasized the benefits of the program in terms of flexibility rather than cost savings.
Don Harrison justified the exclusive arrangement with Spotify by citing the music streaming service’s “phenomenal” popularity and the need for seamless integration with Android services. “If we don’t have Play services and Spotify working properly in the main services, people won’t buy Android phones,” he testified.
As part of the deal, both companies pledged $50 million each to a “success fund”.
Google acknowledged Harrison’s testimony, saying that “a small number of developers” more directly invested in Android and Play could negotiate different service fees as part of a broader partnership.
The company emphasized that these partnerships include substantial financial investment and product integration across a variety of factors, which contributes to a better experience for users and creates opportunities for developers.
While Netflix was offered a discounted rate of 10 percent by Google (which it rejected), Spotify’s unique deal highlights a unique approach to avoiding in-app purchase fees.
In 2023, in line with its historical complaints against in-app purchase fees, Spotify discontinued support for Apple’s App Store billing system to avoid commissions of up to 30 percent. Unlike Epic, which continues its legal battles against both Apple and Google, Spotify appears to have found a less controversial and more cost-effective solution with Google.