Google Admits Spotify Pays No Play Store Fees Due to Secret Deal

In a recent trial between Epic and Google, it was revealed that Spotify, the music streaming platform, made a secret deal with Google regarding payments on Android.

During the trial, Don Harrison, head of global partnerships at Google, confirmed that when users purchased subscriptions through Spotify’s own system, Google didn’t take any commission—that’s right, a zero percent commission.

However, if users went with Google as their payment choice, Spotify paid a much lower four percent fee, which is way less than the usual fifteen percent charged by Google, as reported by The Verge.

Antitrust fight between Google and Epic

During its antitrust battle with Epic, Google fought hard to keep Spotify’s payment details private. Google argued that revealing these numbers could harm discussions with other app developers seeking better rates.

In 2022, Google introduced the User Choice Billing program, which usually reduces its Play Store commission by about four percent if developers use their own payment system. This brings down Google’s standard fifteen percent subscription fee to around eleven percent.

However, developers often don’t save much money because they have to cover the expenses of payment processing themselves. In court, Google has emphasized the program’s advantages in flexibility rather than significant cost savings, according to The Verge.

In the ongoing lawsuit between Epic Games and Google, the agreement between Spotify and Google came to light. Spotify pays a %0 commission to the Play Store when users pay through Spotify's own system and a %4 commission when they pay through Google. pic.twitter.com/AQRgqtCCCr

— Swipeline (@Swipeline_Media) November 21, 2023

Spotify’s popularity influenced Android phone demand

Don Harrison argued that Spotify’s extraordinary popularity warranted a special deal. Having Spotify function seamlessly on Play services and core services was crucial because it influenced people’s decisions to buy Android phones, according to Harrison.

As a part of this unique agreement, both Spotify and Google agreed to contribute fifty million dollars each to a “success fund.”

In response to Don Harrison’s testimony, Google acknowledged the unique arrangement in a statement to The Verge.

“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,” said spokesperson Dan Jackson. “These key investment partnerships allow us to bring more users to Android and Play by continuously improving the experience for all users and [creating] new opportunities for all developers.”

Google offered Netflix a special discounted rate

Google has chosen not to disclose the names of other developers who secured more favorable rates. In the trial, it came to light that Google proposed a special discounted rate of ten percent to Netflix, but Netflix declined the offer.

As a consequence, Netflix no longer provides an in-app purchase option on Android and, as a result, doesn’t pay Google anything for distributing its app, as reported by The Verge.