A Google executive has recently admitted during the ongoing Epic vs Google trial that Spotify, the popular audio company, benefits from a secret deal that exempts them from paying Play Store fees. The revelation sheds light on the intricate partnerships and financial agreements between tech giants and app developers.
Key Takeaway
A secret deal between Google and Spotify came to light during the ongoing Epic vs Google trial, revealing that Spotify is exempt from Play Store fees. This arrangement allows the audio company to avoid the standard 15% fee on subscription apps. The disclosure highlights the intricate partnerships and financial agreements that tech giants like Google forge with app developers.
The Deal Revealed: Spotify’s Fee Exemption
Don Harrison, Google’s head of partnership, testified that Spotify is not required to pay fees when it processes its own payments and only pays a minimal 4% fee when Google processes them. This arrangement allows Spotify to bypass the typical 15% cut taken by Google on subscription apps. Remarkably, both Spotify and Google have pledged to invest $50 million each in a “success fund” as part of their partnership.
Confidentiality Requested: Google’s Attempt to Keep the Deal Sealed
The details of this deal came to light after Google requested the court to keep the specifics confidential earlier in the trial. The company sought to maintain the secrecy surrounding its agreement with Spotify, which exempts the audio giant from Play Store fees.
Strategic Partnerships and User Choice Billing
Google spokesperson Dan Jackson explained that a select group of developers, who have made substantial financial investments and product integrations with Android and Play, may enjoy different service fees as part of broader partnership agreements. These deals, such as the one with Spotify, aim to enhance the overall experience for all users and create new opportunities for developers.
In its efforts to strike similar Play Store deals, Google has previously offered Netflix a reduced fee of just 10% for subscriptions back in 2017. However, Netflix currently does not allow users to purchase subscriptions through its Android app.
Last month, Google reached a settlement with the Match Group that allows the dating app giant to use third-party billing solutions on the Play Store. Additionally, it is worth noting that Epic, the company behind Fortnite, rejected Google’s offers to adopt user choice billing and opted to go to trial. Throughout the trial, numerous revelations have emerged about the inner workings of the Google Play Store, including a rejected $197 million offer to Epic to bring Fortnite to the platform, along with multimillion-dollar deals proposed to Activision Blizzard and Tencent’s Riot Games.
