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Spotify Struck A Deal With Google To Avoid Play Store Fees

Spotify-Struck-A-Deal-With-Google-To-Avoid-Play-Store-Fees

This juicy tidbit was discovered during the Epic v. Google trial

What you should know:

  • As revealed during the Epic v. Google trial, Spotify struck an unprecedented payment agreement with Google, paying a 0% commission for in-app purchases made through its own system.
  • Spotify still received a 4% fee for purchases made through Google’s payment system, which was significantly lower than Google’s standard 15% cut.
  • Spotify’s popularity and influence among Android users justified Google’s “bespoke” deal.
  • Spotify struck an unprecedented payment agreement with Google, allowing the streaming service to keep 100% of subscription fees collected via its own payment system on Android devices.

According to The Verge, Google’s head of global partnerships, Don Harrison, revealed in testimony during the Epic v. Google trial that Spotify paid a remarkable 0% commission for subscriptions through its system. Spotify only took 4% of purchases made through Google’s billing system, a far cry from the standard 15% fee.

Don Harrison of Google

The Google User Choice Billing program, which launched in 2022, reduces the Play Store commission by about 4% for developers who use their payment system. However, the cost savings are often minimal because developers bear the payment processing costs.

Harrison defended Spotify’s “bespoke” agreement by citing its massive popularity and positive impact on Android phone sales and user experience across Google Play services.

Google backed Harrison’s testimony, claiming that it all comes down to a small group of developers making big moves on Android and Play. In a nutshell, these developers receive varying service fees as part of a larger partnership that includes financial investments and product integrations across multiple devices.

These investment partnerships, according to Google, are the company’s way of improving the Android and Play experience for everyone while also opening up new opportunities for all developers.

As part of the customized agreement, Spotify and Google each contributed $50 million to a “success fund,” emphasizing the significance and mutual benefits envisioned.

Spotify previously supported Epic Games in its fight against Google and Apple’s app store fees. In an unexpected turn of events, Spotify joined Google’s User Choice Billing program last year, allowing it to use its own payment system while still paying a lower fee to Google. This special offer demonstrates Google’s willingness to bend the rules for well-known apps like Spotify.

Having said that, the music streaming service has been a vocal opponent of high in-app purchase fees. It took a risk earlier this year by completely abandoning Apple’s App Store billing system in order to avoid a 30% cut.