Goo executive Don Harrison has brought to light a confidential arrangement with Spotify
In the ongoing Epic versus Google trial, a revelation from Google executive Don Harrison has brought to light a confidential arrangement with Spotify. This undisclosed deal allows Spotify to circumvent Play Store fees, as initially reported by The Verge.
Harrison disclosed that Spotify incurs no fees when managing its own payments and only pays a nominal 4% fee when Google handles the transactions. A noteworthy aspect of the arrangement is both companies pledging to contribute $50 million each to a joint “success fund.”
These details emerged following Google’s request to keep the specifics of the Spotify deal confidential earlier this month. Typically, Google imposes a 15% cut on subscription apps, with the possibility of reducing it to 11% through programs like user choice billing, granting developers the flexibility to utilize their own or third-party payment solutions.
In a statement, Google spokesperson Dan Jackson clarified, “A select group of developers investing more directly in Android and Play may encounter different service fees as part of a comprehensive partnership. These partnerships involve substantial financial investments and product integrations across various form factors, allowing us to enhance the Android and Play experience for all users and create new opportunities for developers.”
Google has pursued similar agreements with other major entities. Recent reports suggest that in 2017, the tech giant proposed a 10% fee on Play Store subscriptions to Netflix, a proposal Netflix currently doesn’t accommodate as users cannot purchase subscriptions through the Android app.
Last month, Google reached a settlement with Match Group, permitting the dating app giant to utilize third-party billing solutions on the Play Store. Bumble, a competitor to Match Group, participated in the user choice billing program pilot initiated in November 2022.
Despite Google’s efforts, Epic rejected offers to adopt user choice billing and opted for a trial earlier this month. The trial has unveiled intricate details about the internal workings of the Google Play Store. Notably, in 2021, Google offered $197 million to Epic to host Fortnite on the Play Store, a proposition Epic turned down. Separately, Google has pursued substantial deals with other gaming giants such as Activision Blizzard and Tencent’s Riot Games.
