During the ongoing legal battle between Epic and Google, details have emerged about a special deal between Google and Spotify that allowed the music streaming service to bypass the standard Play Store commission for in-app payments.
The arrangement permitted Spotify users to sign up for subscriptions using the service’s own payment system on Android without paying any commission to Google. However, if users opted to subscribe through Google, Spotify paid a reduced commission of just 4%, significantly lower than the standard 15% commission imposed on most other apps for subscriptions through the Google Play Store.
The revelation could impact Google’s negotiations with other app developers seeking better commission rates. Google introduced the User Choice Billing program in 2022 after facing scrutiny and legal challenges, allowing developers to use their payment systems and pay a reduced 4% commission if they opt in.
While some developers argue that they save little or no money due to additional payment processing costs, Google emphasizes the program’s flexibility. Google’s head of global partnerships, Don Harrison, defended the “bespoke” deal with Spotify during testimony, stating that Spotify’s immense popularity justified the unique arrangement.
Spotify and Google reportedly agreed to contribute $50 million each to a “success fund.” While Google confirmed Harrison’s testimony, it did not disclose other developers receiving similar rates. Netflix previously rejected a 10% discounted rate and no longer offers in-app purchases on Android, while Match Group settled with Google, allowing third-party billing and access to Google Cloud and AI technologies.
Epic, initially involved in the legal action against Google, dropped out, accepting the User Choice Billing deal, while continuing its antitrust case against Google.
