Secret Deal Revealed: Spotify Skips Play Store Fees in Agreement with Google
Google’s secret deal with Spotify has been revealed during the ongoing Epic vs Google trial. According to a testimony by Don Harrison, Google’s head of partnership, Spotify is exempt from paying Play Store fees while processing its own payments. When Google handles the transactions, Spotify only pays a meager 4% fee. Both companies have also agreed to contribute $50 million each to a “success fund.” The details of this deal were initially requested to be sealed by Google, but have now come to light.
Google’s Play Store Fees
Typically, Google charges a 15% fee on subscription apps. However, this fee can be lowered to 11% through programs like user choice billing, which allows developers to utilize their own payment solutions or third-party options. Google spokesperson Dan Jackson stated that “a small number of developers” who have strong partnerships with Android and Play may have different service fees, as part of a larger investment agreement.
Striking Deals with Large Companies
Google has also attempted to negotiate similar Play Store deals with other major companies. In 2017, the search giant offered Netflix a deal to pay only a 10% fee for subscriptions on the Play Store. Currently, Netflix does not allow users to purchase subscriptions through its Android app. Last month, Google reached a settlement with the Match Group, allowing the dating app giant to use third-party billing solutions on the Play Store. Match Group’s competitor, Bumble, was part of the user choice billing program pilot launched in November 2022.
Epic’s Rejection and Trial Revelations
Epic, the company behind Fortnite, rejected Google’s offers to adopt user choice billing and instead opted for a trial. This trial has exposed various details about the inner workings of the Google Play Store. For instance, in 2021, Google offered $197 million to Epic to bring Fortnite to the Play Store, but the offer was turned down. Google has also attempted to strike multimillion-dollar deals with other game developers such as Activision Blizzard and Tencent’s Riot Games.
The ongoing trial continues to shed light on the relationships and negotiations between Google and major app companies, revealing the intricate workings of the Play Store and the various deals struck behind closed doors.