Spotify Bypasses Android’s App Store Fees
New testimony in the Epic vs. Google trial revealed Spotify had a secret deal with Google in regards to Android based payments.
While on the stand, Head of Global Partnerships at Google, Don Harrison confirmed Spotify paid a 0% commission when users chose purchase subscriptions through Spotify.
If the users chose Google as their payment processor, Spotify handed over 4%, which is much less than the common 15% fee.
Google had fought to keep the numbers private during the fight with Epic, saying they could damage negotiations with other app developers who may be wanting more generous rates.
The User Choice Billing program was launched by Google in 2022, and is usually described as shaving around 4% off Google’s Play Store commission, if developers opt to use their own payment system.
This brings Google’s subscription service fee from 15% to around 11%, and often saves developers little to no money, as they also have to finance processing the payments themselves.
Don Harrison said Spotify’s “unprecedented” popularity was large enough to justify a “bespoke” deal.
“If we don’t have Spotify working properly across Play services and core services, people will not buy Android phones.”
Part of the deal was that both parties agreed to commit $50 million each to a “success fund.”
Google spokesperson Dan Jackson said, “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.”
“These key investment partnerships allow us to bring more users to Android and Play by continuously improving the experience for all users and create new opportunities for all developers.”
Google opted to not name other developers who have convinced them to agree to more generous rates.
During the trial it was learned Google offered Netflix a discounted rate of 10%, however the streaming service refused.
Now, Netflix no longer offers an in-app purchase option on Android phones, and no longer pays Google to distribute its app.
Previously, Spotify has complained about in-app purchase fees. In mid-2023, it fully dropped support for Apple’s App Store billing system, as it wanted to avoid paying up to 30% commission.
The company was also one of the highest profile early members of the Coalition for App Fairness, a group including Epic, that supported the antitrust lawsuit against Apple and Google.