A secret Google deal let Spotify completely bypass Android’s app store fees

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Music streaming work Spotify struck a seemingly unsocial and highly generous woody pinch Google for Android-based payments, according to new testimony successful nan Epic v. Google trial. On nan stand, Google caput of world partnerships Don Harrison confirmed Spotify paid a 0 percent committee erstwhile users chose to bargain subscriptions done Spotify’s ain system. If nan users picked Google arsenic their costs processor, Spotify handed complete 4 percent — dramatically little than Google’s more communal 15 percent fee.

Google fought to keep nan Spotify numbers private during its antitrust conflict pinch Epic, saying they could harm negotiations pinch different app developers who mightiness want much generous rates. Google’s User Choice Billing program, launched successful 2022, is typically described arsenic shaving astir 4 percent disconnected Google’s Play Store committee if developers usage their ain costs system, bringing down Google’s 15 percent subscription work interest to much for illustration 11 percent. That often ends up redeeming developers small aliases nary money since they must ft nan costs of costs processing themselves. And successful court, Google has focused connected benefits for illustration greater elasticity alternatively than costs savings.

The Google logo and nan Epic Games logo photoshopped onto a Monopoly board.

The early of Google’s app shop is astatine stake successful a suit by Fortnite publisher Epic Games. Epic sued Google successful 2020 aft a conflict complete in-app acquisition fees, claiming nan Android operating system’s Google Play Store constituted an unlawful monopoly — while Google says its demands would harm Android’s expertise to connection a unafraid personification acquisition and compete pinch Apple’s iOS.

But Harrison says Spotify’s “unprecedented” fame was great capable to justify a “bespoke” deal. “If we don’t person Spotify moving decently crossed Play services and halfway services, group will not bargain Android phones,” Harrison testified. As portion of nan deal, some parties besides agreed to perpetrate $50 cardinal apiece to a “success fund.”

Google acknowledged Harrison’s grounds successful a connection to The Verge. “A mini number of developers that put much straight successful Android and Play whitethorn person different work fees arsenic portion of a broader business that includes important financial investments and merchandise integrations crossed different shape factors,” says spokesperson Dan Jackson. “These cardinal finance partnerships let america to bring much users to Android and Play by continuously improving nan acquisition for each users and create caller opportunities for each developers.”

Google would not sanction different developers that person gotten nan institution to work together to much generous rates. During nan trial, we learned that Google offered Netflix a typical discounted complaint of conscionable 10 percent, but Netflix refused. Netflix nary longer offers an in-app acquisition action connected Android and nary longer pays Google thing to administer its app arsenic a result.

Spotify has complained often astir in-app acquisition fees successful nan past. In mid-2023, it wholly dropped support for Apple’s App Store billing system to debar paying up to a 30 percent commission, and it was 1 of nan highest-profile early members of nan Coalition for App Fairness, a group that included Epic and supported nan Fortnite publisher’s antitrust suit against Apple and Google. But while Epic has continued its ineligible conflict against some parties, Spotify apparently recovered an easier — and acold cheaper — measurement retired of nan Google fight.

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