Spotify has a deal with Google that allows the company to avoid paying commissions when users sign up for subscriptions through the music streaming service’s own payment processing system. Moreover, when customers choose to pay through Google, Spotify only pays the company four percent, compared to the typical 15 percent rate Google charges for payments.
The news came via new testimony from the still-in-progress Epic v. Google trial. The original lawsuit was first filed by Epic Games, which claimed the Google Play Store on Android was acting unfairly to app makers who wished to offer in-app purchases through the store. It’s worth noting that Epic Games filed a nearly identical, albeit unsuccessful, lawsuit against Apple.
Although Spotify initially supported Epic Games in its pursuit, the music streaming service became a recent user of the Google program ‘User Choice Billing,’ which allows Android apps to use independent payment systems in exchange for giving a reduced cut to Google. The search giant previously fought to keep the details of its User Choice Billing agreement with Spotify secret.
Spotify might not be the only popular app receiving favourable treatment from Google, with Netflix being a recent recipient of a personalized deal. The deal was said to include a reduced commission of 10 percent, which Netflix rejected.
Though the trial is still ongoing, both Spotify and Google have agreed to front $50 million in a success fund as part of the deal.