A Google official said in Epic 's lawsuit against Google that a deal with Spotify allows the company to avoid Play Store fees , as reported by The Verge.
See also: Users report problems with Spotify on iOS
According to Don Harrison, Google’s head of partnerships, Spotify pays no commission when it processes its own payments and only pays an unofficial 4% commission when Google processes them. He also said that both companies have committed to investing $50 million each in a “success fund.”
The details were revealed today after Google asked the court to keep the details of its agreement with Spotify that was made earlier this month secret.
Typically, Google takes a 15% from apps . That percentage can be reduced to 11% thanks to programs like user-choice billing, which allows developers to use their own or third-party payment solutions.
“Some developers who invest more directly in Android and the Play Store may have different service fees as part of a broader collaborative plan that includes significant funding and comprehensive product integrations across models.” Google spokesman Dan Jackson said in a statement: “These investments allow us to bring more users to Android and the Play Store, continuously improving the experience for all users and creating new opportunities for all developers.”
See also: Spotify: Does it play playlists based on your preferences via AI?
Google has tried to secure similar deals from major companies for the Play Store. Earlier this month, it was revealed that in 2017 it offered Netflix a deal to pay only a 10% fee to the Play Store for subscriptions. Netflix currently doesn’t allow users to purchase subscriptions through its Android.
Last month, the Mountain View-based company reached an agreement with Match Group to allow the dating app giant to use third-party billing solutions on the Play Store.
However, Epic rejected Google’s proposals to adopt user-choice pricing and went to trial last month. The trial revealed many details about the inner workings of the Google Play Store. For example, in 2021, the company offered Epic $197 million to bring Fortnite to the Play Store, but the gaming company rejected the deal. Separately, Google has tried to strike deals worth millions with other game makers, including Activision Blizzard and Tencent’s Riot Games.
Google has faced a lot of criticism for this secret deal with Spotify. Many felt that it gave Spotify a leg up and set the company apart from other competitors. Some argued that this deal was unfair to other companies that have to pay Play Store fees while Spotify enjoys an exemption from them.
See also: Spotify partners with OpenAI to automatically translate podcasts
Additionally, some criticize Google for a lack of transparency, as this deal was not publicly disclosed earlier. Consumers and businesses feel that there is no equal treatment and that Google favors some companies over others.
Source: techcrunch
