Spotify is allowed to bypass Play Store fees as part of non-disclosure agreement, Google executive says
Google allowed Spotify to circumvent the company’s mandatory Play Store fees, a company executive reportedly confirmed while testifying in the ongoing Epic vs Google lawsuit. The Verge reports that a confidential deal with the streaming giant has emerged, revealing that Spotify was allowed to process its own payments on the service without paying a commission to Google. The search giant previously tried to protect the details of its deal with Spotify during the ongoing case with Fortnite maker Epic Games.
According to reportGoogle’s head of partnerships Don Harrison testified during the proceedings Epic vs. Google trial that Spotify did not pay the company any fees as it processed customer payments on its own. If customers chose to pay Spotify via Google’s in-app billing service, the platform paid Google a 4 percent commission.
Google charges most publishers on its platform a 15 percent cut of all app and in-app purchases, but that figure can be lowered in South Korea, India and 35 other countries where the company offers developers an alternative— user selection invoicing — it reduces the commission by 4 percent.
The report says that apart from the music streaming platform’s popularity on Androidthe Google executive also testified that the search giant and Spotify had agreed to a “success fund” that would see each company commit $50 million (roughly Rs. 410 crore).
It’s worth noting that while Spotify may receive special treatment from Google, the company is still required to pay the in-app purchase commission — which can be up to 30 percent of each transaction — in Apple’s App Store. Like Netflix and many other services, the streaming service does not allow users to purchase a subscription through the Spotify app on iOS.
It’s too early to say whether these revelations will have an impact on Epic Games’ case against Google. The game publisher sued both Apple and Google over their alleged antitrust practices that include preventing the use of alternative billing systems and alternative app stores on iOS and Android, respectively. The lawsuit has revealed a lot of interesting details about Google and other companies – including one multibillion dollar deal with Samsung to have Play Store, Assistant and Search apps by default on Galaxy smartphones.
The Epic vs. Apple case ended earlier this year when the Ninth Circuit Court upheld a 2021 ruling that struck down the iPhone maker’s ban on competing app stores on iOS did not violate US antitrust laws. Apple lost only one claim in the lawsuit – the company had to allow developers to allow links to external payment systems inside their apps. Epic has appealed the verdict at the US Supreme Court, while Apple has asked the court to strike down the Ninth Circuit Court order blocking its anti-governance rules.