Google has confirmed that it struck a special deal with Spotify which lets the music streaming platform bypass the Play Store commission fee. During the ongoing Epic vs Google antitrust case, the deal was revealed by Google’s head of global partnerships Don Harrison.
According to The Verge, as part of the special deal, Spotify paid zero per cent commission when listeners purchased Premium subscriptions using the company’s payment system. However, if a user used Google’s payment system, the music streaming platform had to shell out a 4 per cent commission, which is far below the typical 15 per cent fee the tech giant charges.
Earlier this month, when the judge overseeing the trial asked Google about its deal with Spotify, the tech giant said that the “disclosure of the Spotify deal would be very, very detrimental for the negotiation we’d be having with those other parties” and tried to hide the exact figures.
While Google confirmed Harrison’s testimony in a statement to The Verge, the tech giant tried to justify the deal saying some developers that invest directly in the Android and Play Store ecosystem are offered deals that cut down on the commission fees.
Harrison also revealed that Google and Spotify have agreed to invest $50 million each in a ‘success fund’. He defended the special deal by saying that if they “don’t have Spotify working properly across play services and core services, people will not buy Android phones.”
Introduced last year, Google’s User Choice Billing program typically charges a 15 per cent commission when users make payments via Play Store. But if the developer opts to choose their payment platform, the tech giant offers a 4 per cent discount, bringing the commission down to around 11 per cent. However, Google’s VP of Play partnerships previously admitted that irrespective of developers using the User Choice Billing, they end up paying the same money.
When asked if Google has special arrangements with other companies, the company refused to share more details. Earlier this month, it was revealed the tech giant had offered Netflix a discounted rate of 10 per cent, but the video streaming platform refused it. This is the reason why Netflix users cannot buy membership on Android devices.
While Spotify now has a deal with Google, the music streaming platform has frequently complained about the Play Store commission fees. A few months ago, Spotify ditched Apple’s App Store billing system so it wouldn’t have to pay Apple a dime. The company was also a member of the Coalition for App Fairness, a group that included Fortnite maker Epic.
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