Secret Deal with Google Helps Spotify Dodge Android App Store Fees

In a recent court trial, new details have emerged about a secret deal between Google and music streaming service Spotify. Testimony in the trial, which involves Epic Games suing Google, reveals that Spotify paid a 0 percent commission to Google for in-app purchases made through its own system, compared to the 4 percent commission paid when users chose Google as their payment processor. This is a significant deviation from the standard 15 percent fee.

Google’s User Choice Billing program, started in 2022, reduces the Play Store commission by about 4 percent for developers using their payment system, bringing the subscription service fee to around 11 percent. Google fought to keep Spotify’s numbers private during its antitrust battle with Epic, arguing that releasing such details could impact negotiations with other app developers seeking better rates.

Google’s head of global partnerships, Don Harrison, defended the unique deal with Spotify, saying it was justified by the music streaming service’s “unprecedented” popularity and the necessity of having Spotify working seamlessly across Play services and core services.

In response to The Verge, Google acknowledged Harrison’s testimony, stating that “a small number of developers that 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.” However, Google did not disclose the names of other developers benefiting from more favorable rates.

During the trial, it was also revealed that Google offered Netflix a discounted rate of 10 percent, which the streaming giant declined. In the past, Spotify has been vocal about its opposition to in-app purchase fees, including expressing grievances with Apple’s App Store policies.

The trial between Epic Games and Google continues to uncover intriguing details about the tech giant’s relationships with developers and the deals struck to keep popular apps on the Play Store. The outcome of this trial could have far-reaching implications for the app industry and the future of in-app purchase fees.