Google’s Exclusive Agreement with Spotify Allows for Exemption from Play Store Fees

Spotify’s deal with Google allows it to bypass commission fees for subscriptions made through its own payment system on Android, as revealed in The Verge’s coverage of the ongoing Epic v. Google trial. In exchange for using Google’s payment system, Spotify pays a minimal four percent commission, much lower than the typical 15 percent for subscriptions through the Google Play Store. The deal also includes a joint $50 million “success fund” contribution by both companies.

During the trial, Google’s partnerships head Don Harrison emphasized the importance of having Spotify work seamlessly across Android devices, indicating that people may choose not to buy Android phones if the music streaming service is not properly integrated. This testimony was part of Epic Games’ lawsuit against Google, which alleges that the Play Store imposes monopolistic rules and exorbitant fees on app developers. Spotify initially supported Epic in its legal battle against Google and Apple, but later opted for Google’s User Choice Billing program in 2022, which allows Android apps to use their own payment systems in exchange for a reduced commission to Google.

The trial also revealed Google’s payment of 36 percent of ad revenue to Apple for use of its Safari browser, a figure initially denied by Alphabet CEO Sundar Pichai. Additionally, Google offered a reduced commission of 10 percent to Netflix for in-app subscriptions, which the streaming service declined in favor of not offering in-app sign-ups on its Android app.

The ongoing trials and revelations have brought to light the behind-the-scenes negotiations and exceptions made by tech giants such as Google and Apple for popular apps and services like Spotify and Netflix.